Performance Pay and the Erosion of Worker Cooperation: Field Experimental Evidence
Jeffrey Carpenter () and
Lorenz Götte ()
Additional contact information
Lorenz Götte: University of Bonn
Authors registered in the RePEc Author Service: Lorenz Goette ()
No 2013, IZA Discussion Papers from Institute of Labor Economics (IZA)
We report the results of a field experiment with bicycle messengers in Switzerland and the United States. Messenger work is individualized enough that firms can choose to condition pay on it, but significant externalities in messenger behavior nonetheless give their on-the-job interactions the character of a social dilemma. Firms therefore suffer efficiency losses when messengers fail to cooperate. Second-mover behavior in our sequential Prisoner's Dilemma allows us to characterize the cooperativeness of our participants. We find that messengers, like our student controls, have heterogeneous social preferences, but are much more cooperative than students. Among messengers, we find that employees at firms that pay for performance are significantly less cooperative than those who are paid hourly or are members of cooperatives. To examine whether the difference is the result of treatment or selection we exploit the fact that firm type is location-specific in Switzerland and that entering messengers must work in performance pay firms in the U.S. We find that the erosion of cooperation under performance pay is predominantly due to treatment, and that the treatment effect is relatively rapid, more akin to the differential cueing of a behavioral norm than the gradual acquisition of a new preference.
Keywords: field experiment; conditional cooperation; egoism; social dilemma; altruism; social preference (search for similar items in EconPapers)
JEL-codes: C72 C78 C93 D23 J33 J54 Z13 (search for similar items in EconPapers)
Pages: 25 pages
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
Working Paper: Performance Pay and the Erosion of Worker Cooperation: Field experimental evidence (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2013
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().