Social Interaction, Co-Worker Altruism, and Incentives

24 Pages Posted: 9 Nov 2009

See all articles by Robert Dur

Robert Dur

Erasmus University Rotterdam (EUR) - Department of Economics; Tinbergen Institute; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Joeri Sol

University of Amsterdam

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Abstract

Social interaction with colleagues is an important job attribute for many workers. To attract and retain workers, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a principal-multi-agent model where agents do not only engage in productive activities, but also in social interaction with their colleagues, which in turn creates co-worker altruism. We study how financial incentives for productive activities can improve or damage the work climate. We show that both team incentives and relative incentives can help to create a good work climate.

Keywords: social interaction, altruism, incentive contracts, co-worker satisfaction

JEL Classification: D86, J41, M50

Suggested Citation

Dur, Robert and Sol, Joeri, Social Interaction, Co-Worker Altruism, and Incentives. IZA Discussion Paper No. 4532, Available at SSRN: https://ssrn.com/abstract=1501968 or http://dx.doi.org/10.2139/ssrn.1501968

Robert Dur (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

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Tinbergen Institute

Amsterdam/Rotterdam
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Joeri Sol

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018WB
Netherlands

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