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Letting Down the Team? Evidence of Social Effects of Team Incentives

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  • Philip Babcock
  • Kelly Bedard
  • Gary Charness
  • John Hartman
  • Heather Royer

Abstract

This paper estimates social effects of incentivizing people in teams. In two field experiments featuring exogenous team formation and opportunities for repeated social interactions, we find large team effects that operate through social channels. The team compensation system induced agents to choose effort as if they valued a marginal dollar of compensation for their teammate from two-thirds as much (in one study) to twice as much as they valued a dollar of their own compensation (in the other study). We conclude that social effects of monetary team incentives exist and can induce effort at lower cost than through direct individual payment.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16687.

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Date of creation: Jan 2011
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Handle: RePEc:nbr:nberwo:16687

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  6. Heather Royer & Mark F. Stehr & Justin R. Sydnor, 2012. "Incentives, Commitments and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company," NBER Working Papers 18580, National Bureau of Economic Research, Inc.
  7. William E. Encinosa III & Martin Gaynor & James B. Rebitzer, 1997. "The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems," NBER Working Papers 5953, National Bureau of Economic Research, Inc.
  8. Burger, Nicholas & Charness, Gary & Lynham, John, 2011. "Field and online experiments on self-control," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 393-404, March.
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  16. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
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Cited by:
  1. Sotiris Georganas & Mirco Tonin & Michael Vlassopoulos, 2014. "Peer Pressure and Productivity: The Role of Observing and Being Observed," CESifo Working Paper Series 4572, CESifo Group Munich.
  2. Kuhn, Peter J. & Villeval, Marie Claire, 2011. "Do Women Prefer a Co-operative Work Environment?," IZA Discussion Papers 5999, Institute for the Study of Labor (IZA).
  3. Peter J. Kuhn & Marie-Claire Villeval, 2013. "Are Women More Attracted to Cooperation Than Men?," NBER Working Papers 19277, National Bureau of Economic Research, Inc.
  4. Thomas Cornelissen & Christian Dustmann & Uta Schönberg, 2013. "Peer Effects in the Workplace," CESifo Working Paper Series 4398, CESifo Group Munich.
  5. Gordon B. Dahl & Katrine V. L?ken & Magne Mogstad, 2014. "Peer Effects in Program Participation," American Economic Review, American Economic Association, vol. 104(7), pages 2049-74, July.
  6. Heather Royer & Mark F. Stehr & Justin R. Sydnor, 2012. "Incentives, Commitments and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company," NBER Working Papers 18580, National Bureau of Economic Research, Inc.
  7. Aakvik, Arild & Hansen, Frank & Torsvik, Gaute, 2013. "Dynamic Peer Effects in Sales Teams," Working Papers in Economics 10/13, University of Bergen, Department of Economics.

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