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The Evolution of Cooperative Norms: Evidence from a Natural Field Experiment

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  • Bandiera, Oriana
  • Barankay, Iwan
  • Rasul, Imran

Abstract

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.

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Date of creation: Nov 2005
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Handle: RePEc:cpr:ceprdp:5358

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Keywords: cooperation; group exercise; individual exposure;

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References

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  1. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2001. "Monetary and Non-Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00151423, HAL.
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  4. Orana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social preferences and the response to incentives: Evidence from personnel data," Natural Field Experiments 00212, The Field Experiments Website.
  5. John List, 2004. "Neoclassical theory versus prospect theory: Evidence from the marketplace," Framed Field Experiments 00174, The Field Experiments Website.
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  8. Robert Slonim & Alvin E. Roth, 1998. "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic," Econometrica, Econometric Society, Econometric Society, vol. 66(3), pages 569-596, May.
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  10. 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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Cited by:
  1. John A. List, 2007. "Field Experiments: A Bridge Between Lab and Naturally-Occurring Data," NBER Working Papers 12992, National Bureau of Economic Research, Inc.
  2. Steven Levitt & John List, 2009. "Field experiments in economics: The past, the present, and the future," Artefactual Field Experiments 00079, The Field Experiments Website.
  3. Dolan, P. & Hallsworth, M. & Halpern, D. & King, D. & Metcalfe, R. & Vlaev, I., 2012. "Influencing behaviour: The mindspace way," Journal of Economic Psychology, Elsevier, Elsevier, vol. 33(1), pages 264-277.
  4. Damiani, Mirella & Ricci, Andrea, 2013. "Entrepreneurs’ education and different variable pay schemes in Italian firms," MPRA Paper 46163, University Library of Munich, Germany.
  5. Jim Engle-Warnick & Andreas Leibbrandt, 2006. "Who Gets The Last Word? An Experimental Study Of The Effect Of A Peer Review Process On The Expression Of Social Norms," Departmental Working Papers, McGill University, Department of Economics 2006-11, McGill University, Department of Economics.
  6. Burks, Stephen V. & Carpenter, Jeffrey P. & Götte, Lorenz & Monaco, Kristen & Porter, Kay & Rustichini, Aldo, 2007. "Using Behavioral Economic Experiments at a Large Motor Carrier: The Context and Design of the Truckers and Turnover Project," IZA Discussion Papers 2789, Institute for the Study of Labor (IZA).
  7. Paul Dolan & Robert Metcalfe, 2013. "Neighbors, Knowledge, and Nuggets: Two Natural Field Experiments on the Role of Incentives on Energy Conservation," CEP Discussion Papers dp1222, Centre for Economic Performance, LSE.
  8. Donna Harris & Benedikt Herrmann & Andreas Kontoleon, 2009. "`Two's Company, Three's a Group' The impact of group identity and group size on in-group favouritism," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2009-13, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  9. Mirella Damiani & Andrea Ricci, 2012. "The role of education of entrepreneurs on adoption of different contingent pay schemes: evidence from Italian firms," Quaderni del Dipartimento di Economia, Finanza e Statistica, Università di Perugia, Dipartimento Economia, Finanza e Statistica 116/2013, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  10. Donna Harris & Benedikt Herrmann, 2012. "When to Favour Your Own group? The Threats of Costly Punishments and In-group Favouritism," Economics Series Working Papers 628, University of Oxford, Department of Economics.
  11. Stephen V. Burks & Jeffrey Carpenter & Lorenz Goette & Kristen Monaco & Aldo Rustichini & Kay Porter, 2007. "Using Behavioral Economic Field Experiments at a Large Motor Carrier: The Context and Design of the Truckers and Turnover Project," NBER Working Papers 12976, National Bureau of Economic Research, Inc.

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