New Study Reveals How to Optimize Incentives for Higher Work Effort
The article explores how companies can create fair contracts when they have more information than their workers. By studying a model of contracts, the researchers found that bosses need to offer good rewards for good work and harsh penalties for poor work to motivate their employees. They also discovered that sharing information is better than hiding it, and that having both parties take risks can lead to better outcomes. This shows that being open and fair in business dealings can lead to better results for everyone involved.