Team Incentives in Public Organisations; An Experimental Study
Using a simple production game, the authors investigate whether public firms perform better when they increase the power of their workers’ incentive schemes. In a laboratory experiment, subjects choose between a ‘public firm’ and a ‘private firm’ with team and individual incentives, respectively. When exposed to individual incentives, workers in the public firm increase effort in one parametrisation, but show a decrease in another.
Link
http://www.cpb.nl/eng/pub/cpbreeksen/discussie/60/disc60.pdf