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Clean Evidence on Peer Pressure

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Author Info
Falk, Armin
Ichino, Andrea

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Abstract

While confounding factors typically jeopardise the possibility of using observational data to measure peer effects, field experiments offer the possibility of obtaining clean evidence. In this Paper we measure the output of four randomly selected groups of individuals who were asked to fill letters in envelopes, with a remuneration completely independent of output. For two of these groups the output of peers was exogenously manipulated (low or high) by making individuals aware of the number of letters previously produced by artificial colleagues. In the third group individuals were set up to work one in front of the other, while the fourth group gave the baseline output for independent not manipulated work. Our first finding is that effort of the less productive workers reacts in a sizeable and statistically significant way to peer pressure. Second, there is strong evidence of peer effects when individuals work in pairs. Third, these peer effects work in the direction of making the least productive individuals work harder, thereby increasing overall productivity.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3834.

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Date of creation: Mar 2003
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Handle: RePEc:cpr:ceprdp:3834

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Related research
Keywords: field experiments; incentives; peer effects;

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Find related papers by JEL classification:
D20 - Microeconomics - - Production and Organizations - - - General
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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  1. Andrea Ichino & Giovanni Maggi, 1999. "Work Environment and Individual Background: Explaining Regional Shirking Differentials in a Large Italian Firm," NBER Working Papers 7415, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 1-25, January. [Downloadable!] (restricted)
  3. Encinosa III, William E. & Gaynor, Martin & Rebitzer, James B., 2007. "The sociology of groups and the economics of incentives: Theory and evidence on compensation systems," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 187-214, February. [Downloadable!] (restricted)
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  4. S. Huck & D. Kübler & J. Weibull, . "Social norms and optimal incentives in firms," Sonderforschungsbereich 373 2002-11, Humboldt Universitaet Berlin.
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  5. Falk, Armin & Fischbacher, Urs, 2002. ""Crime" in the lab-detecting social interaction," European Economic Review, Elsevier, vol. 46(4-5), pages 859-869, May. [Downloadable!] (restricted)
  6. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 507-48, May. [Downloadable!] (restricted)
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  7. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May. [Downloadable!] (restricted)
  8. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2000. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," NBER Working Papers 7973, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Daniel S. Nagin & James B. Rebitzer & Seth Sanders & Lowell J. Taylor, 2002. "Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment," American Economic Review, American Economic Association, vol. 92(4), pages 850-873, September. [Downloadable!]
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  10. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August. [Downloadable!] (restricted)
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  11. Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1987. "Tournaments and Piece Rates: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 1-33, February. [Downloadable!] (restricted)
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  12. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
  13. Fahr, Rene & Irlenbusch, Bernd, 2000. "Fairness as a constraint on trust in reciprocity: earned property rights in a reciprocal exchange experiment," Economics Letters, Elsevier, vol. 66(3), pages 275-282, March. [Downloadable!] (restricted)
  14. Bruce Sacerdote, 2001. "Peer Effects With Random Assignment: Results For Dartmouth Roommates," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 681-704, May. [Downloadable!] (restricted)
  15. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects And Welfare Cultures," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 1019-1055, August. [Downloadable!] (restricted)
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  16. van Dijk, Frans & Sonnemans, Joep & van Winden, Frans, 2001. "Incentive systems in a real effort experiment," European Economic Review, Elsevier, vol. 45(2), pages 187-214, February. [Downloadable!] (restricted)
  17. Anne C. Case & Lawrence F. Katz, 1991. "The Company You Keep: The Effects of Family and Neighborhood on Disad- vantaged Youths," NBER Working Papers 3705, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Topa, Giorgio, 1997. "Social Interactions, Local Spillovers and Unemployment," Working Papers 97-17, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  19. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Blackwell Publishing, vol. 60(3), pages 531-42, July. [Downloadable!] (restricted)
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