Friday, March 14, 2008

And Don't Forget the Press Gangs

Organization and incentives in the age of sail

Daniel Benjamin & Christopher Thornberg
Explorations in Economic History, April 2007, Pages 317-341

Abstract:
The British Navy in the age of sail was the most successful bureaucracy of
its time. Its organization and incentive structures differed importantly
from contemporaneous private sailing ventures, but closely resembled those
of today's large corporations. To induce efficient effort, the navy used a
hierarchical tournament, in which sailors competed for higher pay that came
with promotions based on relative performance. Promotion probabilities, the
option value of future promotions, and the higher effort required of men in
higher ranks and on larger vessels, combined to yield a highly skewed pay
structure.


Of course, you could also be "impressed" with the navy's recruiting program....

(Nod to KL)

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