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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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  1. Bornstein, Gary & Gneezy, Uri & Nagel, Rosmarie, 2002. "The effect of intergroup competition on group coordination: an experimental study," Games and Economic Behavior, Elsevier, vol. 41(1), pages 1-25, October.
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  3. 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.
  4. Emre Ozdenoren & Stephen W. Salant & Dan Silverman, 2012. "Willpower And The Optimal Control Of Visceral Urges," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 342-368, 04.
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  8. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 120(3), pages 917-962, August.
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  15. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, Elsevier, Elsevier.
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  17. 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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Citations

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Cited by:
  1. Dahl, Gordon B. & Loken, Katrine Vellesen & Mogstad, Magne, 2012. "Peer Effects in Program Participation," IZA Discussion Papers 6681, Institute for the Study of Labor (IZA).
  2. Cornelissen, Thomas & Dustmann, Christian & Schönberg, Uta, 2013. "Peer Effects in the Workplace," IZA Discussion Papers 7617, Institute for the Study of Labor (IZA).
  3. Peter Kuhn & Marie-Claire Villeval, 2011. "Do Women Prefer a Co-operative Work Environment?," Working Papers 1127, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  4. 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.
  5. 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.
  6. Georganas, Sotiris & Tonin, Mirco & Vlassopoulos, Michael, 2013. "Peer Pressure and Productivity: The Role of Observing and Being Observed," IZA Discussion Papers 7523, Institute for the Study of Labor (IZA).
  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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