Publication: Endogenous social comparisons and the internal organization of firms
Endogenous social comparisons and the internal organization of firms
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Bartling, B. (2012). Endogenous social comparisons and the internal organization of firms. Managerial and Decision Economics, 33, 11–17. https://doi.org/10.1002/mde.1555
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Should workers of a firm be organizationally integrated to realize benefits from benchmarking? Or should they be separated to preclude horizontal social comparisons? This paper highlights a trade-off that arises if social comparisons in firms are endogenous. We analyze a principal multi-agent model in which the principal trades off the reduction of agents' risk exposures by use of relative performance evaluation and the thereby induced social comparisons for which agents must be compensated. Contrary to standard theoretical prediction
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Bartling, B. (2012). Endogenous social comparisons and the internal organization of firms. Managerial and Decision Economics, 33, 11–17. https://doi.org/10.1002/mde.1555
