Team Incentives and Performance : Evidence from a Retail Chain

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2017
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Friebel, Guido
Heinz, Matthias
Krueger, Miriam
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In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3 percent. Each dollar spent on the bonus generates $3.80 in sales, and $2.10 in profit. Wages increase by 2.2 percent while inequality rises only moderately. The analysis suggests effort complementarities to be important, and the effectiveness of peer pressure in overcoming free-riding to be limited. After rolling out the bonus treatment, and control shops' performance converge, suggesting long-term stability of the treatment effect.

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ISO 690FRIEBEL, Guido, Matthias HEINZ, Miriam KRUEGER, Nick ZUBANOV, 2017. Team Incentives and Performance : Evidence from a Retail Chain. In: American Economic Review. 2017, 107(8), pp. 2168-2203. ISSN 0002-8282. eISSN 1944-7981. Available under: doi: 10.1257/aer.20160788
BibTex
@article{Friebel2017Incen-38097,
  year={2017},
  doi={10.1257/aer.20160788},
  title={Team Incentives and Performance : Evidence from a Retail Chain},
  number={8},
  volume={107},
  issn={0002-8282},
  journal={American Economic Review},
  pages={2168--2203},
  author={Friebel, Guido and Heinz, Matthias and Krueger, Miriam and Zubanov, Nick}
}
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