Team Production with Punishment Option: Insights from a Real‐Effort Experiment

Radu Vranceanu, Fouad El Ouardighi and Delphine Dubart

Managerial and Decision Economics, 2015, vol. 36, issue 6, 408-420

Abstract: This paper analyzes the consequences of allowing for punishment in a real‐effort pair production experiment. The behavior of the best performer in the team differs on whether he or she can impose a sanction on the less performing partner. When sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a sanction mechanism allows good performers to focus on their own performance. In the case of costless sanctions, not sanctioning a partner who under‐performs, what we refer to as forgiveness, prompts the latter to improve his or her performance, but applying the sanction has a stronger push effect. Copyright © 2014 John Wiley & Sons, Ltd.

Date: 2015
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