We examine an incentive scheme for a group of agents, where all agents are rewarded if
the group meets its target. If the group does not meet its target, only the agents that meet
their individual target are rewarded. This incentive scheme is applied in the UK Climate
Change Agreements feature this incentive scheme. There is only a difference in outcome
between group and individual rewards if performance is stochastic. Group rewards lead
to lower effort than individual rewards if targets are realistic.
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Paper | pdf (it, 423 KB, 09/10/08) |
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