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Incentives are mechanisms used to create genuine opportunity for contracting parties to work together to achieve good results, rational returns and bear appropriate risks. The question of how to motivate the construction workforce rightly so as to achieve best performance has remained paramount to project owners. This paper aims to investigate on how to model for incentive payoffs in the Nigerian construction industry to effectively use the benefits of incentive mechanisms.

The collected data are analysed using descriptive and inferential statistics, such as frequency counts, charts and principal component analysis.

The findings reveal the metrics for measuring organisational incentive payoff and the scaling factor for each metric. The study further develops the employee incentive payoff models for both operational workers and management staff in the construction sector.

This study provides a practical solution to the application of incentive mechanisms in construction projects. The paper recommends the need for restructuring of incentive mechanisms to significantly impact on other performance criteria, therefore contributing to best performance in project delivery.

Social dilemmas take many forms but all share the property that individual benefits, at least in the short run, conflict with group benefits. This chapter examines how information about the characteristics of group members and the parameters of the dilemma affect decision-making. Particular attention is paid to transformative crises, sudden changes in the dilemma setting that for a short period of time lead to incomplete information. It is posited that these crises cause relatively dramatic shifts in the importance of information.

If we are to examine the role of “controls” in different experimental settings, it is appropriate that the word be defined carefully. The Oxford English Dictionary (Second Edition) defines the verb “control” in the following manner: “To exercise restraint or direction upon the free action of; to hold sway over, exercise power or authority over; to dominate, command.” So the word means something more active and interventionist than is suggested by it’s colloquial clinical usage. Control can include such mundane things as ensuring sterile equipment in a chemistry lab, to restrain the free flow of germs and unwanted particles that might contaminate some test.

The current paper aims to present a formal model illustrating how payoff imbalances among the members of a team of decision makers (DMs) who must undertake a project condition the final outcome obtained. This result builds on the fact that payoffs imbalances would lead to different performance levels among the employees and managers who compose a team. The analysis is applied to a strategic environment, where a project requiring coordination among the DMs within the team must be developed.

The intuition behind the strategic framework on which the results are based is twofold. The authors build on the literature on social comparisons and assume that employees and managers acquire information on the payoffs received by other members of the team while being affected by the resulting comparisons, and they follow the economic literature on firm boundaries determined via incomplete contracts. In this case, employees and managers may underperform if they feel aggrieved by the outcome of the contract giving place to deadweight losses when developing the project.

The authors illustrate how a team-based performance reward structure may lead to a coordinated equilibrium even when team managers and employees receive different payoffs and exhibit shading incentives based on the payoff differentials between them. The authors will also illustrate how identical shading intensities by both groups of DMs imply that shading by the managers imposes a lower cost on the profit structure of the firm because it leads to a lower decrease in the cooperation incentives of the other members of the team. Finally, the authors show how differences in shading intensity between both types of DMs trigger a strategic defect mechanism within the team that determines the outcome of the project.

The novel environment of team cooperation and defection through shading introduced in this paper is designed to deal with the strategic decisions taken by DMs when undertaking a project within a group. In particular, the intensity of shading applied by the DMs will be endogenously determined by the relative payoffs received, which allows to account for different scenarios, where relative payoff differentials among DMs determine the outcome of the project.

The purpose of this paper is to examine whether reputation element affects the decision relative performance of trust, bonus and incentive contracts using social laboratory experiments.

The study conducts the following lab experiments bonus–incentive treatment without reputation, bonus–incentive treatment with reputation and trust–incentive treatment with reputation.

The study finds that the reputation and fairness concerns, in contrast to self-interest, may have a decisive impact on the actual and optimal choices in the reciprocity-based contracts. The principal pays higher salaries in the bonus contract as compared to an incentive contract.

The study contributes to the behavioral economic literature in the following dimensions. The existing literature on lab experiments considers a bonus contract as better than the debt contract; however, it does not consider the trust contract better than the debt contract.

Four hundred professionals were sent surveys which measured the individual's propensity for financial risk and self‐descriptions of personal and business financial risk‐taking behavior. One of four possible incentives (a prepaid $1 payoff, a promised $2 payoff, a $100 lottery, and no incentive) was offered to each surveyed subject. The prepaid $1 incentive resulted in the highest response rate. The type of incentive did not result in meaningful bias in the response pool.

The purpose of this paper is to improve the behaviors coordination mechanism, to maintain the system's long time‐scale and stable competitive capability, when the agents in the system focus on cooperating with each other.

Effort level for every agent, whose dynamics can be described as a stochastic partial differential equation, and the incentive of effort as the control of the corresponding agent, are introduced to describe agents' behavior abstracted. The cooperative stochastic differential game model is constructed: first, the optimal resolve trajectory mapping with profit maximization of the system are obtained, then the transitory imputation coupled with effort initial state of the system by introducing dynamic Shapley value imputation method. Based on the results obtained, the profit distribution strategies and the equilibration incentive compensation mechanism are given, due to the evolution law of the payoff and the state variable.

It is concluded that: the transitory compensation to agent for efforts and incentive, which can be changed with the system state at current and in history and in future changed, would guarantee the realization of the Shapley value imputation throughout the game horizon.

In this paper, the interactivity between agents in the system is considered first. The dynamical Shapley imputation mechanism and the transitory compensatory mechanism are provided to make the imputation more stable and feasible.

The online crowdsourcing has been widely applied in the practice. The purpose of this paper is to investigate the all-pay auction contest in crowdsourcing, wherein a seeker posts a task online and the solvers decide whether to participate in the contest and in what extent to spend efforts on their submissions.

The authors specifically consider two classic contest formats: simultaneous contest and sequential contest, depending on whether the solver can observe the prior solvers’ submissions before making her own effort investment decision or not. They derive both seeker’s and solver’s equilibrium decisions and payoffs under different contest formats, and show that they vary significantly according to the number and the average skill level of solvers.

The results show that a solver would always invest more on her submission under simultaneous contest than under sequential contest, as she cannot confirm how other solvers’ submissions would be. This subsequently intensifies the market competition and brings down a solver’s average payoff under simultaneous contest. Although the simultaneous contest gives rise to a higher expected highest quality of all submissions, it also requires the seeker to spend more search cost to identify the best submission. Therefore, when the number of solvers is high or the average skill level is low, the seeker prefers sequential contest to simultaneous contest. The results also show an analogous preference over two formats for the platform.

This paper investigates two formats of all-pay auction contest in crowdsourcing and evaluates them from the perspective of solvers, seekers and platforms, respectively. The research offers many interesting insights which do not only explain the incentive mechanisms for solvers under different contest formats, but also make meaningful contributions to the seeker’s or the platform’s adoption strategies between two alternative contest formats in crowdsourcing practice.

This paper aims to derive insights about optimal managerial compensation and firm capital structure in unionized firms.

This paper uses applied game theory to address problems of CEO motivation in companies with unionized workforces.

Managers can use high levels of debt and costly bankruptcy to win wage concessions from workers. Alternatively, workers can obstruct management in the detection of poor work. CEO compensation that encourages rent sharing may reduce union hostility and associated deadweight losses. Shareholder value may be maximized by CEO incentive contracts with limited upsides, lower levels of pay, and some entrenchment protections.

This is the only study to use applied game theory to look at how CEO pay and capital structure affects the productivity of a unionized workforce.

This paper is a study of how people with heterogonous individual characteristics self-select into different compensation schemes. A laboratory experiment is designed in which “workers” can join “companies” that pay according to various schemes: piece rate, revenue sharing, individual tournament, and team tournament. The main findings are: (1) Subjects with high relative performance always prefer individual tournament. (2) Risk-averse subjects are less likely to choose competitive schemes. (3) Individual tournament attracts fewer women than men, which is partially explained by gender-specific social preferences. (4) Compared to people with siblings, only children are less likely to accept any team-based schemes without information about their teammates. (5) The provision of feedback about relative performance can adjust individuals’ biased self-beliefs and then influence their self-selections.