Design of the incentive system in consideration of peer pressure

Agency Theory Approach

Abstract

What kind of influence does the sense of rivalry between workers in the company have on the property as the team? The sense of rivalry between workers as "peer pressure" may raise the productivity as the team, but at the same time the psychological stress caused by competitiveness increasing. The incentive design studies so far have focused on pressure produced by difference of the quantity of worker's effort or the effort cost. In this research, in addition to that, we examine the situation how peer pressure produced by comparison of the outputs by the workers in terms of the agency theory.