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Peer Enforcement in Teams: Evidence from High-Skill Professional Workers with Repeated Interactions

Author

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  • Brad R. Humphreys

    (West Virginia University, College of Business and Economics)

  • Jie Yang

    (University of Alberta, Department of Economics)

Abstract

Organizing employees into teams increases productivity but also generates incentives to shirk. Recent research suggests that peer enforcement plays an important role in deterring shirking in teams. We analyze 10 years of performance and compensation data for NFL offensive linemen, a high-skill, high-salary and repeatedly interacting team, using the Hausman-Taylor estimator to control for unobservable individual-specific heterogeneity. We find evidence that teammates’ effort signals reduce the salaries of individual offensive linemen, providing an optimal, low powered sanctioning mechanism for individual workers in this setting, and that a separate, independently monitored individual effort signal also reduces salaries.

Suggested Citation

  • Brad R. Humphreys & Jie Yang, 2014. "Peer Enforcement in Teams: Evidence from High-Skill Professional Workers with Repeated Interactions," Working Papers 14-24, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:14-24
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    File URL: https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=1114&context=econ_working-papers
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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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