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The Economics of Shame in Work Groups: How Mutual Monitoring Can Decrease Cooperation in Teams


  • Orr, Shepley W


Recent economic theory suggests that free riding under group piece-rate incentive schemes can be alleviated by mutual monitoring and social sanctioning. This assumption is challenged by showing that the presence of the price mechanism in mutual monitoring and sanctioning can decrease the motivation to cooperate for certain types of agents: because the social rewards which may develop through work can be egoistically motivated, withholding disapproval matters less to cooperative agents. Hence, mutual monitoring can decrease cooperation in teams depending upon the proportion of normatively vs. egoistically motivated types. Evidence for these cognitive mechanisms from experimental social psychology is presented with a mathematical model. Copyright 2001 by WWZ and Helbing & Lichtenhahn Verlag AG

Suggested Citation

  • Orr, Shepley W, 2001. "The Economics of Shame in Work Groups: How Mutual Monitoring Can Decrease Cooperation in Teams," Kyklos, Wiley Blackwell, vol. 54(1), pages 49-66.
  • Handle: RePEc:bla:kyklos:v:54:y:2001:i:1:p:49-66

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    References listed on IDEAS

    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
    2. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    3. Andrei Shleifer, 2004. "Does Competition Destroy Ethical Behavior?," American Economic Review, American Economic Association, vol. 94(2), pages 414-418, May.
    4. Bruno S. Frey, 2004. "Dealing with Terrorism – Stick or Carrot?," Books, Edward Elgar Publishing, number 3435.
    5. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    6. Shleifer, Andrei, 2000. "Inefficient Markets: An Introduction to Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780198292272, June.
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    Cited by:

    1. John S. Heywood & Uwe Jirjahn, 2014. "Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 521-552, September.
    2. Green, Colin P. & Heywood, John S., 2010. "Profit sharing and the quality of relations with the boss," Labour Economics, Elsevier, vol. 17(5), pages 859-867, October.
    3. Thommes, Kirsten & Vyrastekova, Jana & Akkerman, Agnes, 2015. "Behavioral spillovers from freeriding in multilevel interactions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 78-87.
    4. repec:lan:wpaper:3014 is not listed on IDEAS
    5. repec:lan:wpaper:3169 is not listed on IDEAS
    6. Brice Corgnet & Roberto Hernán-González & Stephen Rassenti, 2011. "Real Effort, Real Leisure and Real-time Supervision: Incentives and Peer Pressure in Virtual Organizations," Working Papers 11-05, Chapman University, Economic Science Institute.
    7. repec:lan:wpaper:2920 is not listed on IDEAS
    8. Luigi Mittone & Francesca Bortolami, 2007. "Free riding and norms of control: self determination and imposition. An experimental comparison," CEEL Working Papers 0704, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    9. Tan, Jonathan H.W. & Zizzo, Daniel John, 2008. "Groups, cooperation and conflict in games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 1-17, February.
    10. Thomas Cornelissen & John Heywood & Uwe Jirjahn, 2014. "Reciprocity and Profit Sharing: Is There an Inverse U-shaped Relationship?," Journal of Labor Research, Springer, vol. 35(2), pages 205-225, June.
    11. Margit Osterloh & Bruno S. Frey, "undated". "Corporate Governance for Crooks? The Case for Corporate Virtue," IEW - Working Papers 164, Institute for Empirical Research in Economics - University of Zurich.

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