Voluntary Teaming and Effort

Claudia Keser and Claude Montmarquette ()

No 745, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: In a series of experimental games, each of two players may choose between remuneration based on either private or team effort. Although at least one of the players has the subgame perfect equilibrium strategy to choose remuneration based on private effort, we frequently observe team remuneration chosen by both players. Team remuneration allows for high payoff for each player for cooperation, but at the same time provides individual incentives to take a free ride on the other player's effort. Due to significant cooperation we observe that in team remuneration participants make higher profits than in private remuneration. We also observe that, when participants are not given the option of private remuneration, they cooperate significantly less.

Keywords: Team effort; voluntary collaboration; experimental economics (search for similar items in EconPapers)
JEL-codes: C72 C90 H41 J33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-exp and nep-gth
Date: 2007
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Working Paper: Voluntary Teaming and Effort (2004)
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