Peer Pressure and Moral Hazard in Teams: Experimental Evidence
Team incentives have been found to be particularly effective both in the lab and in the field despite the moral hazard in teams problem identified by HolmstrÃ¶m (1982). In a newly developed virtual workplace, we show that, in line with HolmstrÃ¶m, moral hazard in teams is indeed pervasive. Subsequently, we find strong evidence for the conjecture of Kandel and Lazear (1992) that peer pressure may resolve the moral hazard in teams problem. Organizations equipped with a very weak form of peer monitoring (anonymous and without physical proximity, verbal threats or face-to-face interactions) perform as well as those using individual incentives.
Other versions of this item:
- Brice Corgnet & Roberto Hernán González & Stephen Rassenti, 2013. "Peer Pressure and Moral Hazard in Teams: Experimental Evidence," Working Papers 13-01, Chapman University, Economic Science Institute.
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Socialism, institutions & human nature
by chris dillow in Stumbling and Mumbling on 2013-01-28 14:39:57
- Georganas, Sotiris & Tonin, Mirco & Vlassopoulos, Michael, 2015.
"Peer pressure and productivity: The role of observing and being observed,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 117(C), pages 223-232.
- 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).
- 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.
- Brice Corgnet & Roberto Hernán-Gonzalez & Stephen Rassenti, 2013. "Firing Threats and Tenure: Incentive effects and impression management," Working Papers 13-15, Chapman University, Economic Science Institute.
- Simon Gächter & Lingbo Huang & Martin Sefton, 2016. "Combining “real effort” with induced effort costs: the ball-catching task," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 687-712, December.
- Gächter, Simon & Huang, Lingbo & Sefton, Martin, 2015. "Combining "Real Effort" with Induced Effort Costs: The Ball-Catching Task," IZA Discussion Papers 9041, Institute for the Study of Labor (IZA).
- Simon Gaechter & Lingbo Huang & Martin Sefton, 2015. "Combining "Real Effort" with Induced Effort Costs: The Ball-Catching Task," Discussion Papers 2015-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
- Simon Gaechter & Lingbo Huang & Martin Sefton, 2015. "Combining "Real Effort" with Induced Effort Costs: The Ball-Catching Task," CESifo Working Paper Series 5345, CESifo Group Munich.
- Corgnet, Brice & Hernán-González, Roberto & Rassenti, Stephen, 2015. "Firing threats: Incentive effects and impression management," Games and Economic Behavior, Elsevier, vol. 91(C), pages 97-113.
- Gill, David & Stone, Rebecca, 2015. "Desert and inequity aversion in teams," Journal of Public Economics, Elsevier, vol. 123(C), pages 42-54.
- David Gill & Rebecca Stone, 2011. "Desert and Inequity Aversion in Teams," Economics Series Working Papers 563, University of Oxford, Department of Economics.
- Gill, David & Stone, Rebecca, 2014. "Desert and Inequity Aversion in Teams," IZA Discussion Papers 8444, Institute for the Study of Labor (IZA).
- David, Gill & Rebecca, Stone, 2012. "Desert and inequity aversion in teams," MPRA Paper 36864, University Library of Munich, Germany.
- Brice Corgnet & Joaquín Gómez-Miñambres & Roberto Hernán-González, 2015. "Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough," Management Science, INFORMS, vol. 61(12), pages 2926-2944, December.
- Joaquín Gómez-Miñambres & Brice Corgnet & Roberto Hernán González, 2012. "Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough," Working Papers 12-24, Chapman University, Economic Science Institute.
- Joaquín Gómez-Miñambres & Brice Corgnet & Roberto Hernán-Gonzalez, 2013. "Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough," Working Papers 1305, Departament Empresa, Universitat Autònoma de Barcelona, revised Apr 2013.
- Brice Corgnet & Ludivine Martin & Peguy Ndodjang & Angela Sutan, 2015. "On the Merit of Equal Pay: When Influence Activities Interact with Incentive Setting," Working Papers 15-09, Chapman University, Economic Science Institute.
- Katharina M. Eckartz, 2014. "Task enjoyment and opportunity costs in the lab - the effect of financial incentives on performance in real effort tasks," Jena Economic Research Papers 2014-005, Friedrich-Schiller-University Jena.
- Brice Corgnet & Roberto Hernán-González, 2015. "Revisiting the Tradeoff between Risk and Incentives: The Shocking Effect of Random Shocks," Working Papers 15-05, Chapman University, Economic Science Institute.
- Koch, Alexander K. & Nafziger, Julia, 2016. "Gift exchange, control, and cyberloafing: A real-effort experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 409-426.
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