We document the establishment and evolution of a cooperative norm among workers using evidence from a natural field experiment on a leading UK farm. Workers are paid according to a relative incentive scheme under which increasing individual effort raises a worker's own pay but imposes a negative externality on the pay of all co-workers, thus creating a rationale for cooperation. As a counterfactual, we analyse worker behaviour when workers are paid piece rates and thus have no incentive to cooperate. We find that workers cooperate more as their exposure to the relative incentive scheme increases. We also find that individual and group exposure are substitutes, namely workers who work alongside colleagues with higher exposure cooperate more. Shocks to the workforce in the form of new worker arrivals disrupt cooperation in the short term but are then quickly integrated into the norm. Individual exposure, group exposure, and the arrival of new workers have no effect on productivity when workers and paid piece rates and there is no incentive to cooperate.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
5358.
Find related papers by JEL classification: C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
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Glenn W. Harrison & John A. List, 2004.
"Field Experiments,"
Journal of Economic Literature,
American Economic Association, vol. 42(4), pages 1009-1055, December.
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Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 2004.
"Through Trial and Error to Collusion,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(1), pages 205-224, 02.
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