Real Effort, Real Leisure and Real-time Supervision: Incentives and Peer Pressure in Virtual Organizations

Brice Corgnet, Roberto Hernán-González and Stephen Rassenti
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Roberto Hernán-González: Economic Science Institute, Chapman University
Authors registered in the RePEc Author Service: Roberto Hernán González

Working Papers from Chapman University, Economic Science Institute

Abstract: We propose a novel approach to the analysis of organizations by developing a computerized platform that reproduces relevant features of existing organizations such as real-effort tasks and real-leisure alternative activities (Internet). In this environment, we find strong incentives effects as organizations using individual incentives significantly outperform those relying on team incentives. Combining real-time peer monitoring with team incentives, we report striking evidence of positive peer effects as production increases by 50% and Internet usage decreases by 54% compared with organizations using team incentives alone. Peer monitoring allows virtual organizations using team incentives to perform as well as those using individual incentives. However, the positive effect of peer monitoring does not apply to low performers.

Keywords: team incentives; free-riding; monitoring; peer pressure; virtual organization (search for similar items in EconPapers)
JEL-codes: C9 D23 J0 J41 (search for similar items in EconPapers)
Pages: 82 pages
Date: 2011
New Economics Papers: this item is included in nep-bec, nep-hrm, nep-ict, nep-lab and nep-ppm
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:11-05

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