(How) Do Risky Perks Benefit Firms? The Case of Unlimited Vacation

Working Papers

This paper addresses the recent trend of offering unlimited vacation to employees. While potentially useful for acquiring human capital benefits, unlimited vacation is a risky perk for firms due to the possibility of abuse.Read More

Firm Responsiveness to Location Subsidies: Regression Discontinuity Estimates from a Tax Credit Formula

Working Papers

In 2011, California Governor Jerry Brown recognized several of the state’s existing firm incentive policies aimed at catalyzing innovative activity in the state, to be ineffectual, citing poor incentive design.Read More

Grow Faster by Changing Your Innovation Narrative

Published Research

Managers have no shortage of advice on how to achieve organic sales growth through innovation. Prescriptions range from emulating the best practices of innovative companies like Amazon, Starbucks, and 3M to adopting popular concepts such as design thinking, lean startup principles, innovation boot camps, and co-creation with customers. Read More

Optimal Network Design for Inducing Effort

Working Papers

Many companies create and manage communities where consumers observe and exchange information about the effort expended by other consumers. Such communities are especially popular in the areas of fitness, education, dieting, and financial savings. Read More

When do Firms Go Green? Comparing Price Incentives with Command and Control Regulations in India

Working Papers

India has a multitude of environmental regulations but a history of poor enforcement. Between 1996 and 2004, India’s Supreme Court required 17 cities to enact action plans to reduce air pollution through a variety of command-and-control (CAC) environmental regulations.Read More

Inequality Aversion When the Reward is Scarce: The Case of Salary vs. Equity Compensation

Working Papers

Do workers have different equality preferences depending on the type of payoff? In many firms, the distribution of equity compensation is more equal than the distribution of salary. We design an experimental group production game to examine how workers respond to combinations of different distributions of equity and salary.Read More

How to Design Incentives that Make Change Stick

It’s one of the paradoxes of being human: even when we know what’s good for us, we often make choices that are less than optimal. Wharton Professor Iwan Barankay researches how incentives can be used to create positive behavioral changes even after the incentive goes away.Read More

Experimentation and Project Selection: Screening and Learning

Published Research

We study optimal contracting in a setting that combines experimentation and adverse selection. In our leading example, an entrepreneur (agent) is better informed than the investor (principal) about both the quality the project (risky arm’s distribution) and the entrepreneur’s outside option (payoff of the safe arm).Read More

Managerial Compensation and Corporate Spinoffs

Published Research

This article investigates how corporate spinoffs affect managerial compensation. These deals are found to improve the alignment of spinoff firm managers’ incentive compensation with stock market performance, especially among spinoff firm managers that used to be divisional managers of the spun-off subsidiary, and particularly when the spun-off subsidiary performs better than or is unrelated to its parent firm’s remaining businesses.Read More

A randomized control trial in oral health on varying financial incentives and frequency of performance feedback for dental self-care

Funded Research Proposal

The burden of oral disease in the U.S. is high, and in need of novel approaches to improving preventive oral health behaviors. Almost half of U.S. adults have periodontal disease, while 92% of adults and 50% of children experience dental caries. The Affordable Care Act (ACA) put new emphasis on financial incentives in which financial rewards for patients and providers are linked to health decisions and outcomes.Read More

Complementary Assets as Pipes and Prisms: Innovation Incentives and Trajectory Choices

Published Research

The issue of the failure of incumbent firms in the face of radical technical change has been a central question in the technology strategy domain for some time. We add to prior contributions by highlighting the role a firm’s existing set of complementary assets have in influencing its investment in alternative technological trajectories.Read More

Designing Effective Financial Incentives with Start-up Technologies to Induce Long Term Health Improvements

Funded Research Proposal

Numerous technological devices are coming to market that permit for end-user but also remote tracking of health related choices (exercise, medication adherence, weight loss etc.). These devices are transformative as they can be used to inform firms and legislators on how to design financial and non-financial incentives to induce healthy choices.Read More

Team Incentives: Evidence from a Firm Level Experiment

Published Research

Many organizations rely on teamwork, and yet field evidence on the impacts of team-based incentives remains scarce. Compared to individual incentives, team incentives can affect productivity by changing both workers’ effort and team composition. We present evidence from a field experiment designed to evaluate the impact of rank incentives and tournaments on the productivity and composition of teams.Read More