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Workplace Incentives and Organizational Learning

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Abstract:

This paper studies learning within organizations when incentives change. We use a simple principal-agent model to show how, in the presence of imperfect information over the shape of the production function, worker's effort choice changes over time as information is disclosed and processed. We also show that changes in workers compensation can trigger such learning process. We test this hypothesis using personnel records from a Peruvian egg production plant. Exploiting a sudden change in the compensation schedule, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm.

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Corporate Finance and Governance

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FuenteSSRN Electronic Journal
Cuartil año de publicaciónNo disponible
VolumenNo disponible
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pISSNNo disponible
ISSN1556-5068

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