Too Much Monitoring, Not Enough Performance Pay  

Oleh:

Meza, David de ; Southey, Clive

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 109 no. 454 (Mar. 1999), page 126-140.
Fulltext: 126.pdf (218.66KB)

Isi artikel

This paper endogenises the internal organisation of competitive ®rms in a simple general equilibrium framework. The options are monitored teams, unmonitored teams motivated by collective performance pay, and self-employment. The choice of incentive scheme depends on market price and also affects price through its in¯uence on output. As more people opt for self employment, pecuniary externalities increase the pressure on the rest to follow suit and Pareto rankable multiple equilibria arise. The conditions for a competitive equilibrium to be constrained ef®cient are restrictive and everyone may gain from policies limiting monitoring and self employment and from the imposition of entry taxes.

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