Using social connections and financial incentives to solve coordination failure: A quasi-field experiment in India's manufacturing sector

Farzana Afridi, Amrita Dhillon (), Sherry Xin Li and Swati Sharma

Journal of Development Economics, 2020, vol. 144, issue C

Abstract: Production processes are often organized in teams, yet there is limited evidence on whether and how social connections and financial incentives affect productivity in tasks that require coordination among workers. We simulate assembly line production in a lab-in-the-field experiment in which workers exert real effort in a minimum-effort game in teams whose members are either socially connected or unconnected and are paid according to the group output. We find that group output increases by 18%, and coordination improves by 30–39% when workers are socially connected with their co-workers. These findings can plausibly be explained by the higher levels of pro-social motivation between co-workers in socially connected teams.

Keywords: Caste-based networks; Social incentives; Financial incentives; Minimum effort game; Output; Coordination (search for similar items in EconPapers)
JEL-codes: C93 D20 D22 D24 J33 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304387820300201
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Using Social Connections and Financial Incentives to Solve Coordination Failure: A Quasi-Field Experiment in India’s Manufacturing Sector (2019)
Working Paper: Using Social Connections and Financial Incentives to Solve Coordination Failure: A Quasi-Field Experiment in India's Manufacturing Sector (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:144:y:2020:i:c:s0304387820300201

DOI: 10.1016/j.jdeveco.2020.102445

Access Statistics for this article

Journal of Development Economics is currently edited by M. R. Rosenzweig

More articles in Journal of Development Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().