Social Capital, Corporate Culture, and Incentive Intensity

Posted: 17 May 2002

See all articles by Rafael Rob

Rafael Rob

University of Pennsylvania - Department of Economics

Peter B. Zemsky

INSEAD - Strategy; Centre for Economic Policy Research (CEPR)

Abstract

We study the design of incentives in a firm in which cooperation among workers is important. Since cooperation is not observed, the firm is unable to reward workers for it. Workers may, nonetheless, cooperate because they derive direct utility from cooperation. This utility is endogenously determined and depends on how much others have cooperated in the past as well as on the firm's incentive intensity. Consequently, incentives are chosen with the aim of enhancing workers' utility from cooperation or of building "social capital." We show that the optimal choice of incentives can create cultural differences across firms.

Suggested Citation

Rob, Rafael and Zemsky, Peter B., Social Capital, Corporate Culture, and Incentive Intensity. Available at SSRN: https://ssrn.com/abstract=307725

Rafael Rob (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-6775 (Phone)
215-573-2057 (Fax)

Peter B. Zemsky

INSEAD - Strategy ( email )

Boulevard de Constance
77305 Fontainebleau
France
+33 1 60 72 4162 (Phone)
+31 1 60 74 5500 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,099
PlumX Metrics