Bonus incentives and team effort levels: Evidence from the “Field”*

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Abstract

This study explores the effect of bonus incentive mechanisms with a focus on how such a scheme influences aggregate production levels of teams of workers, specifically. We identify this using data from a highly competitive setting in professional sport, which involves a unique tournament design rule in an elite European rugby competition. The modelling results demonstrate qualified evidence that introducing bonuses to encourage teams to score via the most-difficult, highest-reward mode, incentivizes teams to increase effort to earn the bonus, and without reducing production after the bonus is achieved.

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Butler, R., Lenten, L. J. A., & Massey, P. (2020). Bonus incentives and team effort levels: Evidence from the “Field”*. Scottish Journal of Political Economy, 67(5), 539–550. https://doi.org/10.1111/sjpe.12249

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