Development Lunch Seminar - Stefano Caria, Warwick University


Location: 3060F Jenkins Nanovic Halls

Interested parties are welcome to attend.

Title: "The Allocation of Incentives in Multi-Layered Organizations"


Does the allocation of incentives across the hierarchy of an organization matter

for its performance? In a field experiment with a large public-health organization in

Sierra Leone, we find that health-care provision is highly affected by how incentives are

allocated between frontline workers and their supervisors. Sharing incentives equally

between these two layers raises output by 61% compared to the unilateral allocations

that are typical in public organizations. These results are surprising under a Coasian

view of organizations, but can be reconciled under an alternative theory that emphasizes

the coexistence of effort complementarities and contractual frictions. We leverage the

experiment to estimate a structural model that quantifies these two forces, and their

implications for the optimal design of incentive policies in multi-layered organizations.


Please contact Alejandro Estefan for information.