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The Surprising Capacity of the Company You Keep: Revealing Group Cohesion as a Powerful Factor of Team Production

Author

Listed:
  • Simon Gaechter

    (University of Nottingham)

  • Chris Starmer

    (University of Nottingham)

  • Fabio Tufano

    (University of Nottingham)

Abstract

We introduce the concept of 'group cohesion' to study the economic consequences of social relationships in team production. We measure group cohesion, adapting the 'oneness scale' from psychology to group level. A series of experiments, including a pre-registered replication, reveals that higher cohesion groups are more likely to achieve Pareto-superior outcomes in weak-link coordination games. Judged against benchmarks, the effects of cohesion are economically large. We identify beliefs rather than social preferences as a primary mechanism explaining the effects of cohesion. Our comprehensive evidence establishes group cohesion as a powerful production factor and a useful new tool of economic research.

Suggested Citation

  • Simon Gaechter & Chris Starmer & Fabio Tufano, 2019. "The Surprising Capacity of the Company You Keep: Revealing Group Cohesion as a Powerful Factor of Team Production," Discussion Papers 2019-16, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    • Handle: RePEc:not:notcdx:2019-16
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    References listed on IDEAS

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    Cited by:

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    4. Dhillon, Amrita & Peeters, Ronald & Bartrum, Oliver & Yüksel, Ayşe Müge, 2020. "Hiring an employee’s friends is good for business: Overcoming moral hazard with social networks," Labour Economics, Elsevier, vol. 67(C).
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