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Incentive Design with Spillovers by Dasaratha, Krishna; Golub, Benjamin; Shah, Anant is a scholarly article available to read on EtoBox.

What is Incentive Design with Spillovers about?

A principal uses payments conditioned on stochastic outcomes of a team project to elicit costly effort from the team members. We develop a multi-agent generalization of a classic first-order approach to contract optimization by leveraging methods from network games. The main results characterize the optimal allocation of incentive pay across agents and outcomes. Incentive optimality requires equalizing, across agents, a product of (i) individual productivity (ii) organizational centrality and (iii) responsiveness to monetary incentives.

Author

Dasaratha, Krishna; Golub, Benjamin; Shah, Anant

Published

2024

Language

EN