Bonus incentives and team effort levels: Evidence from the “Field”* |
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Authors: | Robert Butler Liam J A Lenten Patrick Massey |
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Institution: | 1. Department of Economics, University College Cork, Cork, Ireland;2. Euler Capital, Drysdale, Vic., Australia;3. Compecon Limited, Dublin, Ireland |
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Abstract: | This study explores the effect of bonus incentive mechanisms with a focus on how such a scheme influences aggregate production levels of teams of workers, specifically. We identify this using data from a highly competitive setting in professional sport, which involves a unique tournament design rule in an elite European rugby competition. The modelling results demonstrate qualified evidence that introducing bonuses to encourage teams to score via the most-difficult, highest-reward mode, incentivizes teams to increase effort to earn the bonus, and without reducing production after the bonus is achieved. |
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Keywords: | bonuses effort incentives sport teams |
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