Letting Down the Team? Evidence of Social Effects of Team Incentives

Philip Babcock, Kelly Bedard (), Gary Charness, John Hartman and Heather Royer

No 16687, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper estimates social effects of incentivizing people in teams. In two field experiments featuring exogenous team formation and opportunities for repeated social interactions, we find large team effects that operate through social channels. The team compensation system induced agents to choose effort as if they valued a marginal dollar of compensation for their teammate from two-thirds as much (in one study) to twice as much as they valued a dollar of their own compensation (in the other study). We conclude that social effects of monetary team incentives exist and can induce effort at lower cost than through direct individual payment.

JEL-codes: B49 C93 J01 J33 (search for similar items in EconPapers)
Date: 2011-01
Note: EH
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Citations: View citations in EconPapers (22)

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