It is standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. Yet it may be useful to consider social forces in mechanism design and contract theory. We devise an experiment to explore optimal contracts in a hidden information context. A principal offers one of three possible contract menus to a team of two...

today, teams are a key resource for learning and work in organizations and this has increased the importance of designing team-based structures. diversity management teams is something that managers should consider when team building. the effect of team diversity on team outcomes and its moderating variable,hasn’t completely identified yet in iran. therefore, given the importance of, this study...

We consider a competitive labor market with purely firm-specific differences in workers’ disutilities of productive effort, firms’ outputs depend on the joint efforts of many workers, and individual worker characteristics cannot be directly observed by firms. Firms compete in ex ante contracts relating workers’ rewards to overall output, offered prior to the production period. Under assumptions...

This paper analyzes how incentive provision in team production is affected if agents are inequity averse in the sense of Fehr and Schmidt (1999). By deriving optimal contracts accounting for inequity aversion we find that efficient effort choices can be implemented with simple budget-balancing sharing rules if agents are sufficiently inequity averse. Conditions on inequity aversion become less ...

As on-field success is nowadays the main objective of European soccer clubs, good management needs to extract highest sport from squad talent at hand. Because teams differ in their quality, performance be compared with best practice comparable units. One remarkable source heterogeneity across composition, which can produce gains diversity together communication costs. The paper studies efficien...