IDEAS home Printed from https://ideas.repec.org/p/bgu/wpaper/1108.html
   My bibliography  Save this paper

See No Evil: Information Chains and Reciprocity in Teams

Author

Listed:
  • Roi Zultan

    (Department of Economics, Ben-Gurion University of the Negev, Beer-Sheva 84105, Israel)

  • Eva-Maria Steiger

    (Max Planck Institute of Economics, Jena)

Abstract

Transparency in teams can facilitate cooperation. We study contribution decisions by agents when previous decisions can be observed. We find that an information chain, in which each agent directly observes only the decision of her immediate predecessor, is at least as effective as a fully-transparent protocol in inducing cooperation under increasing returns to scale. In a comparable social dilemma, the information chain leads to high cooperation both in early movers when compared to a non-transparent protocol and in late movers when compared to a fully-transparent protocol. we conclude that information chains facilitate cooperation by balancing positive and negative reciprocity.

Suggested Citation

  • Roi Zultan & Eva-Maria Steiger, 2011. "See No Evil: Information Chains and Reciprocity in Teams," Working Papers 1108, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:1108
    as

    Download full text from publisher

    File URL: http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/1108.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. M. Vittoria Levati & Tibor Neugebauer, 2004. "An Application of the English Clock Market Mechanism to Public Goods Games," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 153-169, June.
    2. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    3. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    4. Jan Potters & Martin Sefton & Lise Vesterlund, 2007. "Leading-by-example and signaling in voluntary contribution games: an experimental study," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 169-182, October.
    5. Eyal Winter, 2004. "Incentives and Discrimination," American Economic Review, American Economic Association, vol. 94(3), pages 764-773, June.
    6. Chen, Xiao-Ping & Au, Wing Tung & Komorita, S. S., 1996. "Sequential Choice in a Step-Level Public Goods Dilemma: The Effects of Criticality and Uncertainty," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(1), pages 37-47, January.
    7. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 327-358.
    8. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    9. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
    10. Grossman, Sanford J. & Perry, Motty, 1986. "Perfect sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 39(1), pages 97-119, June.
    11. Alwine Mohnen & Kathrin Pokorny & Dirk Sliwka, 2008. "Transparency, Inequity Aversion, and the Dynamics of Peer Pressure in Teams: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 693-720, October.
    12. Richard Ashley & Sheryl Ball & Catherine Eckel, 2010. "Motives for Giving: A Reanalysis of Two Classic Public Goods Experiments," Southern Economic Journal, John Wiley & Sons, vol. 77(1), pages 15-26, July.
    13. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    14. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 761-784.
    15. Simon Gächter & Daniele Nosenzo & Martin Sefton, 2012. "The Impact of Social Comparisons on Reciprocity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1346-1367, December.
    16. Bag, Parimal Kanti & Pepito, Nona, 2011. "Double-edged transparency in teams," Journal of Public Economics, Elsevier, vol. 95(7), pages 531-542.
    17. M. Vittoria Levati & Matthias Sutter & Eline van der Heijden, 2007. "Leading by Example in a Public Goods Experiment with Heterogeneity and Incomplete Information," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(5), pages 793-818, October.
    18. Claudia Keser & Frans Van Winden, 2000. "Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
    19. Bruno S. Frey & Stephan Meier, 2004. "Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment," American Economic Review, American Economic Association, vol. 94(5), pages 1717-1722, December.
    20. Urs Fischbacher & Simon Gachter, 2010. "Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments," American Economic Review, American Economic Association, vol. 100(1), pages 541-556, March.
    21. John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February.
    22. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    23. Chen, Yan, 2008. "Incentive-compatible Mechanisms for Pure Public Goods: A Survey of Experimental Research," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 67, pages 625-643, Elsevier.
    24. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    25. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    26. Sebastian J. Goerg & Sebastian Kube & Ro'i Zultan, 2010. "Treating Equals Unequally: Incentives in Teams, Workers' Motivation, and Production Technology," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 747-772, October.
    27. M. Vittoria Levati & Ro’i Zultan, 2011. "Cycles of Conditional Cooperation in a Real-Time Voluntary Contribution Mechanism," Games, MDPI, vol. 2(1), pages 1-15, January.
    28. Hermalin, Benjamin E, 1998. "Toward an Economic Theory of Leadership: Leading by Example," American Economic Review, American Economic Association, vol. 88(5), pages 1188-1206, December.
    29. Clark, Kenneth & Sefton, Martin, 2001. "The Sequential Prisoner's Dilemma: Evidence on Reciprocation," Economic Journal, Royal Economic Society, vol. 111(468), pages 51-68, January.
    30. Andreoni, James & Samuelson, Larry, 2006. "Building rational cooperation," Journal of Economic Theory, Elsevier, vol. 127(1), pages 117-154, March.
    31. Klor, Esteban F. & Kube, Sebastian & Winter, Eyal & Zultan, Ro'i, 2011. "Can Higher Bonuses Lead to Less Effort? Incentive Reversal in Teams," IZA Discussion Papers 5501, Institute of Labor Economics (IZA).
    32. Eyal Winter, 2009. "Incentive Reversal," American Economic Journal: Microeconomics, American Economic Association, vol. 1(2), pages 133-147, August.
    33. Jennifer C. Coats & William S. Neilson, 2005. "Beliefs About Other-Regarding Preferences in a Sequential Public Goods Game," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 614-622, July.
    34. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 3.
    35. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 7.
    36. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    37. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
    38. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 179-221.
    39. Andreoni, James & Brown, Paul M. & Vesterlund, Lise, 2002. "What Makes an Allocation Fair? Some Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 40(1), pages 1-24, July.
    40. A. J. Auerbach & M. Feldstein (ed.), 1987. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 2, number 2.
    41. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
    42. Gächter, Simon & Nosenzo, Daniele & Renner, Elke & Sefton, Martin, 2010. "Sequential vs. simultaneous contributions to public goods: Experimental evidence," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 515-522, August.
    43. Eyal Winter, 2006. "Optimal incentives for sequential production processes," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 376-390, June.
    44. McLennan, Andrew, 1985. "Justifiable Beliefs in Sequential Equilibrium," Econometrica, Econometric Society, vol. 53(4), pages 889-904, July.
    45. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    46. Rachel Croson & Jen Shang, 2008. "The impact of downward social information on contribution decisions," Experimental Economics, Springer;Economic Science Association, vol. 11(3), pages 221-233, September.
    47. Guttman, Joel M., 1986. "Matching behavior and collective action : Some experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 7(2), pages 171-198, June.
    48. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    49. Dorsey, Robert E, 1992. "The Voluntary Contributions Mechanism with Real Time Revisions," Public Choice, Springer, vol. 73(3), pages 261-282, April.
    50. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    51. Yeon-Koo Che & Seung-Weon Yoo, 2001. "Optimal Incentives for Teams," American Economic Review, American Economic Association, vol. 91(3), pages 525-541, June.
    52. Daniele Nosenzo & Martin Sefton, 2011. "Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 721-754, October.
    53. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 4.
    54. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    55. John S. Heywood & Uwe Jirjahn, 2004. "Teams, Teamwork and Absence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 765-782, December.
    56. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 2.
    57. Bag, Parimal Kanti & Pepito, Nona, 2011. "Double-edged transparency in teams," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 531-542, August.
    58. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 8.
    59. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 5.
    60. Eyal Winter, 2010. "Transparency and incentives among peers," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 504-523, September.
    61. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 1.
    62. Brandts, Jordi & Schram, Arthur, 2001. "Cooperation and noise in public goods experiments: applying the contribution function approach," Journal of Public Economics, Elsevier, vol. 79(2), pages 399-427, February.
    63. Klor, Esteban F. & Kube, Sebastian & Winter, Eyal & Zultan, Ro’i, 2014. "Can higher rewards lead to less effort? Incentive reversal in teams," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 72-83.
    64. Bruno S. Frey & Alois Stutzer (ed.), 2007. "Economics and Psychology: A Promising New Cross-Disciplinary Field," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062631, April.
    65. 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.
    66. Sugden, Robert, 1984. "Reciprocity: The Supply of Public Goods through Voluntary Contributions," Economic Journal, Royal Economic Society, vol. 94(376), pages 772-787, December.
    67. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-1037, September.
    68. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    69. Charles R. Plott & Vernon L. Smith (ed.), 2008. "Handbook of Experimental Economics Results," Handbook of Experimental Economics Results, Elsevier, edition 1, volume 1, number 6.
    70. Y. Joseph Lin, 1997. "Division of Labor in Teams," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 403-423, June.
    71. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Esteban F. Klor & Sebastian Kube & Eyal Winter & Ro'i Zultan, 2011. "Can Higher Bonuses Lead to Less E ort? Incentive Reversal in Teams," Levine's Working Paper Archive 786969000000000073, David K. Levine.
    2. Klor, Esteban F. & Kube, Sebastian & Winter, Eyal & Zultan, Ro’i, 2014. "Can higher rewards lead to less effort? Incentive reversal in teams," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 72-83.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Steiger, Eva-Maria & Zultan, Ro'i, 2014. "See no evil: Information chains and reciprocity," Journal of Public Economics, Elsevier, vol. 109(C), pages 1-12.
    2. Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Sequential versus Simultaneous Contributions to Public Goods: Experimental Evidence," CESifo Working Paper Series 2602, CESifo.
    3. Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Sequential versus simultaneous contributions to public goods: Experimental evidence," Discussion Papers 2009-07, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    4. Kurt A. Ackermann & Ryan O. Murphy, 2019. "Explaining Cooperative Behavior in Public Goods Games: How Preferences and Beliefs Affect Contribution Levels," Games, MDPI, vol. 10(1), pages 1-34, March.
    5. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    6. Marie Claire Villeval, 2012. "Contribution au bien public et préférences sociales : Apports récents de l'économie comportementale," Post-Print halshs-00681348, HAL.
    7. Gill, David & Stone, Rebecca, 2015. "Desert and inequity aversion in teams," Journal of Public Economics, Elsevier, vol. 123(C), pages 42-54.
    8. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    9. Bracha, Anat & Menietti, Michael & Vesterlund, Lise, 2011. "Seeds to succeed?," Journal of Public Economics, Elsevier, vol. 95(5), pages 416-427.
    10. Emrah Arbak & Marie Claire Villeval, 2013. "Voluntary Leadership: Selection and Influence," Post-Print halshs-00664830, HAL.
    11. Antoni Bosch-Domènech & Joaquim Silvestre, 2017. "The role of frames, numbers and risk in the frequency of cooperation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 245-267, September.
    12. Pablo Guillen & Danielle Merrett & Robert Slonim, 2015. "A New Solution for the Moral Hazard Problem in Team Production," Management Science, INFORMS, vol. 61(7), pages 1514-1530, July.
    13. Ambrus, Attila & Pathak, Parag A., 2011. "Cooperation over finite horizons: A theory and experiments," Journal of Public Economics, Elsevier, vol. 95(7), pages 500-512.
    14. Dong, Lu & Falvey, Rod & Luckraz, Shravan, 2019. "Fair share and social efficiency: A mechanism in which peers decide on the payoff division," Games and Economic Behavior, Elsevier, vol. 115(C), pages 209-224.
    15. Emma von Essen & Marieke Huysentruyt & Topi Miettinen, 2020. "Exploration in Teams and the Encouragement Effect: Theory and Experimental Evidence," Management Science, INFORMS, vol. 66(12), pages 5861-5885, December.
    16. Krasteva, Silvana & Saboury, Piruz, 2021. "Informative fundraising: The signaling value of seed money and matching gifts," Journal of Public Economics, Elsevier, vol. 203(C).
    17. Andrej Angelovski & Tibor Neugebauer & Maroš Servatka, 2019. "Can Rank-Order Competition Resolve the Free-Rider Problem in the Voluntary Provision of Impure Public Goods? Experimental Evidence," Working Papers CESARE 1705, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    18. Emma von Essen & Marieke Huysentruyt & Topi Miettinen, 2019. "Exploration in Teams and the Encouragement Effect: Theory and Evidence," Economics Working Papers 2019-10, Department of Economics and Business Economics, Aarhus University.
    19. Martijn J. van den Assem & Dennie van Dolder & Richard H. Thaler, 2012. "Split or Steal? Cooperative Behavior When the Stakes Are Large," Management Science, INFORMS, vol. 58(1), pages 2-20, January.
    20. Xiaochuan Huang & Takehito Masuda & Yoshitaka Okano & Tatsuyoshi Saijo, 2014. "Cooperation among behaviorally heterogeneous players in social dilemma with stay or leave decisions," Working Papers SDES-2014-7, Kochi University of Technology, School of Economics and Management, revised Feb 2015.

    More about this item

    Keywords

    team production; public goods; incentives; externality; information; transparency; conditional cooperation;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bgu:wpaper:1108. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/edbguil.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aamer Abu-Qarn (email available below). General contact details of provider: https://edirc.repec.org/data/edbguil.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.