The Evolution Of Cooperation In Business: Individual Vs. Group Incentives

Daniel Ladley (), Ian Wilkinson and Louise Young

No 13/14, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: Cooperative relations, within and between firms, play important roles in business. How to produce such relations, however, is less well understood. Building on work in evolutionary biology we examine the conditions under which group based incentives result in better performance than individual based incentives. We find that when individual and group interests are not aligned, group incentive systems lead to both higher group and individual performance. Hybrid reward systems, with both group and individual components, are found on average to be inferior to pure group based systems, but superior for some specific cases.

Keywords: Emergence of cooperation; Incentive systems; Iterated games; Group selection (search for similar items in EconPapers)
JEL-codes: C63 D00 M52 (search for similar items in EconPapers)
Date: 2013-07
New Economics Papers: this item is included in nep-bec, nep-cdm, nep-evo and nep-hpe
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Citations: View citations in EconPapers (1)

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