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Letting Down the Team? Evidence of Social Effects of Team Incentives

  • Philip Babcock
  • Kelly Bedard
  • Gary Charness
  • John Hartman
  • Heather Royer

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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File URL: http://www.nber.org/papers/w16687.pdf
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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
Note: HC HE
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  16. 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.
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