Incentives in Organizations | Zendy

Robert V. Gibbons | Zendy

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Incentives in Organizations

Author(s) -

Robert V. Gibbons

Publication year - 1998

Publication title -

the journal of economic perspectives

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 9.614

H-Index - 196

eISSN - 1944-7965

pISSN - 0895-3309

DOI - 10.1257/jep.12.4.115

Subject(s) - incentive , coase theorem , agency (philosophy) , argument (complex analysis) , sketch , principal–agent problem , economics , point (geometry) , organizational behavior , positive economics , public relations , sociology , law and economics , microeconomics , management , political science , social science , transaction cost , biochemistry , chemistry , corporate governance , geometry , mathematics , algorithm , computer science

In this paper, the author summarizes four new strands in agency theory that help him think about incentives in real organizations. As a point of departure, The author begins with a quick sketch of the classic agency model. He then discusses static models of objective performance measurement that sharpen Kerr's argument; repeated-game models of subjective performance assessments; incentives for skill development rather than simply for effort; and incentive contracts between versus within organizations. The author concludes by suggesting two avenues for further progress in agency theory: better integration with organizational economics, as launched by Coase (1937) and reinvigorated by Williamson (1975, 1985), and cross-pollination with other fields that study organizations, including industrial relations, organizational sociology, and social psychology.

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