Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232650 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13898
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper studies learning within organizations when incentives change. We use a simple principal-agent model to show how, in the presence of imperfect information over the shape of the production function, worker's effort choice changes over time as information is disclosed and processed. We also show that changes in workers compensation can trigger such learning process. We test this hypothesis using personnel records from a Peruvian egg production plant. Exploiting a sudden change in the compensation schedule, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm.
Subjects: 
organizational learning
workplace incentives
inputs
JEL: 
D22
D24
J24
J33
M11
M52
M54
O12
Document Type: 
Working Paper

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