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The Breakdown of Morale

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  • Nick Vikander

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    (Erasmus University Rotterdam)

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    Abstract

    This paper studies how morale in teams can break down. It interprets high morale as team members working together productively, either because of a sense of fairness or because of implicit incentives from repeated interactions. Team members learn that lay-offs will occur at a fixed future date, which will eventually cause morale to break down. The paper shows that the breakdown of morale can vary in size and the equilibrium outcomes can be Pareto ranked. A firm's measures to encourage cooperation may actually hurt morale, by convincing opportunistic team members to imitate and later take advantage of cooperative colleagues.

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    Bibliographic Info

    Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-027/1.

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    Date of creation: 12 Mar 2009
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    Handle: RePEc:dgr:uvatin:20090027

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    Web page: http://www.tinbergen.nl

    Related research

    Keywords: morale; teams; cooperation;

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    13. Serrano, Roberto & Zapater, Inigo, 1998. "The Three-Legged Race: Cooperating to Compete," Games and Economic Behavior, Elsevier, vol. 22(2), pages 343-363, February.
    14. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
    15. Rotemberg, Julio J, 1994. "Human Relations in the Workplace," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(4), pages 684-717, August.
    16. Jonathan Levin, 2002. "Multilateral Contracting And The Employment Relationship," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 117(3), pages 1075-1103, August.
    17. Hirshlifer, David & Rassmusen, Eric, 1989. "Cooperation in a repeated prisoners' dilemma with ostracism," Journal of Economic Behavior & Organization, Elsevier, vol. 12(1), pages 87-106, August.
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