[16 October] The 179th Osaka Workshop on Economics of Institutions and Organizations/ Hideshi Itoh (Graduate School of Business and Finance, Waseda University)

Presenter: Hideshi Itoh (Graduate School of Business and Finance, Waseda University)
Title: “Effort and Incentive Pay in Retail Managers” (joint with Desmond (Ho-Fu) Lo, Chieko Minami, and Ruo Shangguan)

Date: Friday, 16 October 2026, 13:30–15:00
Venue: Only in-person at Conference Room, 6th floor,
　　　　　OSIPP (Osaka School of International Public Policy) Building,
　　　　　Toyonaka Campus

Registration: Please email Ms. Kitabayashi (yuri-kitabayashi [at] iss.u-tokyo.ac.jp)

Abstract: This paper studies how superiors’ effort combines with incentive pay to motivate subordinates’ effort. We develop a principal–agent model that distinguishes the superior’s effort into two kinds: monitoring, aimed at checking the subordinate’s behavior, and supervision, aimed at enhancing his productivity. We test its implications using observations on store managers and their subordinate department managers from a large retailer. The evidence is broadly consistent with the model’s predictions: monitoring and incentive pay interact negatively in generating sales performance, whereas supervisory effort and incentive pay interact positively. Our study underscores the importance of distinguishing the principal’s effort in settings where incentive pay motivates agent effort.

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The meeting is organized in collaboration with International Public Policy Seminar