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Worker Self-Selection and the Profits from Cooperation

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Author Info
Kosfeld, Michael () (University of Frankfurt)
von Siemens, Ferdinand () (University of Amsterdam)

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Abstract

We investigate a competitive labor market with team production. Workers differ in their motivation to exert team effort and types are private information. We show that there can exist a separating equilibrium in which workers self-select into different firms and firms employing cooperative workers make strictly positive profits. Profit differences across firms persist because cooperation strictly increases output and worker separation requires firms employing cooperative workers to pay out weakly lower wages.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3881.

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Length: 13 pages
Date of creation: Dec 2008
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Handle: RePEc:iza:izadps:dp3881

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Related research
Keywords: team work; self-selection;

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Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June. [Downloadable!] (restricted)
  2. Jeffrey Carpenter & Erika Seki, 2005. "Do Social Preferences Increase Productivity? Field Experimental Evidence from Fishermen in Toyama Bay," IZA Discussion Papers 1697, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Simon Gaechter, 2006. "Conditional cooperation: Behavioral regularities from the lab and the field and their policy implications," Discussion Papers 2006-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robert Dur & Joeri Sol, 2008. "Social Interaction, Co-Worker Altruism, and Incentives," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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