Interested parties are welcome to attend.
Title: "The Allocation of Incentives in Multi-Layered Organizations"
Abstract
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.