Co-location and Incentives

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 21.02.2006, 12:15 - 13:30


Presentation by 

Eyal Winter (Hebrew University, Jerusalem)


The paper studies the effect of the information agents have about their peers’ effort on the principal’s cost of providing incentives. We use the analysis to address the issue of co-location in organizations, i.e., moving workers from private offices to open spaces or “war rooms”. Using directed graphs to represent peer information we show how the pricipal can gain from more transparancy among peers. We also use the analysis to argue that process-based teams are more effective than function-based teams.

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