Competition, Cooperation, and Corporate Culture
Teamwork and cooperation between workers can be of substantial value to a firm, yet the level of worker cooperation often varies between individual firms. We show that these differences can be the result of labor market competition if workers have heterogeneous preferences and preferences are private information. In our model there are two types of workers: selfish workers who only respond to monetary incentives, and conditionally cooperative workers who might voluntarily provide team work if their co-workers do the same. We show that there is no pooling in equilibrium, and that workers self-select into firms that differ in their incentives as well as their resulting level of team work. Our model can explain why firms develop different corporate cultures in an ex-ante symmetric environment. Moreover, the results show that, contrary to first intuition, labor market competition does not destroy but may indeed foster within-firm cooperation.
|Date of creation:||Jul 2007|
|Date of revision:|
|Publication status:||published in: RAND Journal of Economics, 2011, 42 (1), 23–43|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simon Gächter & Christian Thöni, 2004.
"Social learning and voluntary cooperation among like-minded people,"
University of St. Gallen Department of Economics working paper series 2004
2004-12, Department of Economics, University of St. Gallen.
- Simon Gächter & Christian Thöni, 2005. "Social Learning and Voluntary Cooperation Among Like-Minded People," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 303-314, 04/05.
- Timothy Besley & Maitreesh Ghatak, 2005.
"Competition and Incentives with Motivated Agents,"
American Economic Review,
American Economic Association, vol. 95(3), pages 616-636, June.
- Timothy Besley & Maitreesh Ghatak, 2003. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 2202, London School of Economics and Political Science, LSE Library.
- Tim Besley & Maitreesh Ghatak, 2005. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 928, London School of Economics and Political Science, LSE Library.
- Besley, Timothy J. & Ghatak, Maitreesh, 2004. "Competition and Incentives with Motivated Agents," CEPR Discussion Papers 4641, C.E.P.R. Discussion Papers.
- repec:oup:qjecon:v:120:y:2005:i:3:p:917-962 is not listed on IDEAS
- Kandel, Eugene & Lazear, Edward P, 1992.
"Peer Pressure and Partnerships,"
Journal of Political Economy,
University of Chicago Press, vol. 100(4), pages 801-17, August.
- Kremer, M & Maskin, E, 1996.
"Wage Inequality and Segregation by Skill,"
96-23, Massachusetts Institute of Technology (MIT), Department of Economics.
- Eric Van den Steen, 2010.
"On the origin of shared beliefs (and corporate culture),"
RAND Journal of Economics,
RAND Corporation, vol. 41(4), pages 617-648.
- Van den Steen, Eric, 2005. "On the Origin of Shared Beliefs (and Corporate Culture)," Working papers 27855, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Saint-Paul, Gilles, 1999.
"On the Distribution of Income and Worker Assignment under Intra-Firm Spillovers, with an Application to Ideas And Networks,"
CEPR Discussion Papers
2290, C.E.P.R. Discussion Papers.
- Gilles Saint-Paul, 2001. "On the Distribution of Income and Worker Assignment under Intrafirm Spillovers, with an Application to Ideas and Networks," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 1-37, February.
- Gilles Saint Paul, 1999. "On the distribution of income and worker assignment under intra-firm spillovers, with an application to ideas and networks," Economics Working Papers 417, Department of Economics and Business, Universitat Pompeu Fabra.
- Jody Hoffer Gittell & Andrew von Nordenflycht & Thomas A. Kochan, 2004. "Mutual gains or zero sum? Labor relations and firm performance in the airline industry," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(2), pages 163-180, January.
- Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
- Ichino, Andrea & Maggi, Giovanni, 2000.
"Work Environment And Individual Background: Explaining Regional Shirking Differentials In A Large Italian Firm,"
CEPR Discussion Papers
2387, C.E.P.R. Discussion Papers.
- Andrea Ichino & Giovanni Maggi, 1999. "Work Environment and Individual Background: Explaining Regional Shirking Differentials in a Large Italian Firm," NBER Working Papers 7415, National Bureau of Economic Research, Inc.
- Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation," Harvard Institute of Economic Research Working Papers 1777, Harvard - Institute of Economic Research.
- Urs Fischbacher & Simon Gaechter & Ernst Fehr, .
"Are People Conditionally Cooperative? Evidence from a Public Goods Experiment,"
IEW - Working Papers
016, Institute for Empirical Research in Economics - University of Zurich.
- 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.
- William E. Encinosa, III & Martin Gaynor & James B. Rebitzer, .
"The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems,"
GSIA Working Papers
49, Carnegie Mellon University, Tepper School of Business.
- Encinosa III, William E. & Gaynor, Martin & Rebitzer, James B., 2007. "The sociology of groups and the economics of incentives: Theory and evidence on compensation systems," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 187-214, February.
- Encinosa III, William E. & Gaynor, Martin & Rebitzer, James B., 2005. "The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems," IZA Discussion Papers 1851, Institute for the Study of Labor (IZA).
- 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.
- repec:oup:qjecon:v:115:y:2000:i:3:p:1057-1090 is not listed on IDEAS
- repec:oup:qjecon:v:102:y:1987:i:2:p:179-221 is not listed on IDEAS
- Kaniska Dam & David Pérez-Castrillo, 2001.
"The Principal-Agent Matching Market,"
UFAE and IAE Working Papers
503.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Kaniska Dam, 2003. "The Principal-Agent Matching Market," CESifo Working Paper Series 945, CESifo Group Munich.
- DAM, Kaniska & PEREZ-CASTRILLO, David, . "The principal-agent matching market," CORE Discussion Papers RP 1903, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- repec:oup:qjecon:v:90:y:1976:i:4:p:630-49 is not listed on IDEAS
- repec:oup:qjecon:v:117:y:2002:i:1:p:39-84 is not listed on IDEAS
- Rafael Rob & Peter Zemsky, .
"Social Capital, Corporate Culture and Incentive Intensity,"
Penn CARESS Working Papers
7380c2f90d0b2f362ad71f139, Penn Economics Department.
- Rafael Rob & Peter Zemsky, 2002. "Social Capital, Corporate Culture, and Incentive Intensity," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 243-257, Summer.
- van Damme, E.E.C., 1989.
"Stable equilibria and forward induction,"
Other publications TiSEM
bd598a8f-f017-4cab-a9ed-8, Tilburg University, School of Economics and Management.
- 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.
- Tobias Heldt, 2005. "Conditional cooperation in the field: Cross-country skiers' behavior in sweden," Natural Field Experiments 00268, The Field Experiments Website.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2927. 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: (Mark Fallak)
If references are entirely missing, you can add them using this form.