Significance of Work Incentives from Bonuses: Some New Evidence

摘要

The evidence in the paper corroborates an important behavioral assumption ofprincipal-agent theory: that agents are (indeed) motivated by their bonuses. A 1984 data set is examined of 131 managers of the computer and electronics-industry in the Netherlands. The author finds that these managers are positively and significantly motivated by their bonuses, even after potentially confounding tax and signalling effects, and the sensitivity of bonuses for effort are statistically controlled for. However, he also finds that work incentives from bonuses are weak, on average 2 of the 47 hours that these managers work per week are induced by their bonuses. So, in sum, he finds that work incentives from bonuses are significant in an econometric sense, but insignificant in an economic sense.