Abstract

In many situations, agents take risks by choosing an action that increases their performance immediately, but that potentially leads to a large loss. The current paper studies how such risk-taking behavior depends on the level of competition that the agents face. We study a tournament model and we find that more intense competition, measured by the number of competitors as well as their relative standing, induces agents to take higher risks. We use a rich panel data set on professional biathlon competitions as well as survey data from professional biathletes to confirm the model predictions. Finally, we discuss implications for organizational decision-making. 

Abstract

Job advertisements are a key instrument for companies to attract talent. We conduct a field experiment in which we randomize the content of job advertisements for STEM jobs in one of the largest European technology firms. Specifically, we study how highlighting job flexibility and career advancement in job advertisements causally affects the firm’s pool of applicants. We find large treatment effects of entry-, but not for senior-level positions in the firm: highlighting job flexibility increases the total number of female and male applicants, while emphasizing career advancement only raises applications by men. Both effects are entirely driven by applicants residing outside of the federal state in which the firm is located. In a survey experiment among STEM students, we find that the content of job advertisements shapes young professionals’ beliefs about the work environment at the firm. Most importantly, we find that students expect better career benefits, but lower work-life balance when career advancement is highlighted. Our study highlights how job advertisements affect the total number of applications as well as applicants’ quality, diversity, region of residence and beliefs.

Abstract

Prior work highlights the value of relation-specific assets and knowledge-sharing routines in interfirm relationships, but little is known about how short-term interventions can build these resources. We propose that temporary transactional benefits encourage engagement, leading to accumulated firm-specific knowledge and relational assets. In a field experiment with a travel company that distributes products via intermediaries, 253 of 757 independent agencies were randomly granted access to a service hotline, lowering transaction costs for frontline agents and facilitating knowledge transfer about the firm’s products and processes. Sales increase in response to the intervention, in particular among agencies with weaker prior ties, showing such initiatives help cultivate new relationships. The treatment effects persist beyond the period of the intervention and extend to non-targeted products, indicating durable relational resources.

Abstract

We analyze the effect of employment-quota policies on the development of uncertainty and stereotypes in a model of inaccurate statistical discrimination with ambiguity about worker abilities. We show that, even if group characteristics are identical, higher uncertainty about one group can result in discriminatory employment decisions. The success of a quota in correcting the beliefs then depends crucially on the firm’s learning process. In particular, we find that the more confident the firm is in its initial priors, the longer a quota needs to be implemented until beliefs are sufficiently corrected such that discriminatory behavior vanishes.

Abstract

Empirical research on gender pay gaps relies primarily on formal payroll data, potentially overlooking a significant component of total economic returns in sectors where illicit income is prevalent, such as the hospitality or retail industries. We conduct an RCT in a restaurant chain where servers can engage in theft by failing to register self-serving breakfast buffet orders and instead pocketing the customer’s payment. Our intervention raises the barriers to this theft by requiring a multiple-employee ordering process. The treatment increases registered buffet orders by 9 percent, an effect driven by those employees most likely to engage in theft prior to the intervention. As physical consumption of core buffet ingredients remains identical between the treatment and control groups, a reduction in employee theft is the only plausible explanation for our findings. The treatment effect is twice as large for male servers compared to female servers. In the control group, this illicit income creates a gender gap of 18 percent during breakfast shifts and 10 percent in total monthly income—gender pay gaps that our intervention effectively eliminates. Male servers adapt to the loss in illicit income by quitting the firm more often, working more overtime, and using alternative methods of stealing from the firm and directly from customers. The latter findings highlight how a compliance measure can backfire: by restricting the theft it targets, it may inadvertently trigger a shift toward illicit methods that pose even greater reputational risks for the firm.

Abstract

We investigate how to motivate sales agents in intermediary markets. In collaboration with a large travel company, we run a field experiment with more than 1,200 independently owned intermediaries that sell our study firm’s own products as well as products from competitors to end customers. The intermediaries employ sales agents responsible for customer interaction. We compare the impact of different forms of monetary incentives. We develop a conceptual formal model hypothesizing that incentives for intermediaries (i) generally increase sales, and are more effective when targeting (ii) sales agents rather than owners of the intermediaries, (iii) intermediaries with weaker monetary incentives prior to the intervention, and (iv) products where the firm has no competitive advantage. We find that higher commission payments to the agencies' owners has no discernible effects, while directly incentivizing sales agents through vouchers raises sales for agencies with low prior commission rates. The incentive effects are driven by products where the firm has a weaker market position, while they have no discernible effects on product sales where the firm has a strong competitive advantage. We analyze underlying mechanisms using surveys and further administrative data.

Abstract

Understanding the heterogeneous effects of team-based incentives is crucial for designing effective compensation schemes, yet empirical evidence remains limited. We study this issue using a randomized controlled field experiment in a German retail bank with 77 branches and 320 employees. In treated branches, employees received a bonus tied to collective sales performance. The team incentive increases the average transaction amount by about 3.8 percent relative to the control group. This average effect conceals substantial heterogeneity. The positive impact is significantly stronger in shifts with more employees on duty, consistent with team incentives fostering cooperation and effort complementarities. Treatment effects also vary by employee ability: performance gains are driven primarily by employees who were not previously top performers, while high-performing employees exhibit no significant response. Our findings provide causal evidence on how team incentives operate and offer guidance for incentive design in organizations.