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on Cognitive and Behavioural Economics |
| By: | Bandiera, Oriana (London School of Economics); Barankay, Iwan (University of Pennsylvania); Rasul, Imran (University College London) |
| Abstract: | Many organizations rely on teamwork, and yet field evidence on the impacts of team-based incentives remains scarce. Compared to individual incentives, team incentives can affect productivity by changing both workers' effort and team composition. We present evidence from a field experiment designed to evaluate the impact of rank incentives and tournaments on the productivity and composition of teams. Strengthening incentives, either through rankings or tournaments, makes workers more likely to form teams with others of similar ability instead of with their friends. Introducing rank incentives however reduces average productivity by 14%, whereas introducing a tournament increases it by 24%. Both effects are heterogeneous: rank incentives only reduce the productivity of teams at the bottom of the productivity distribution, and monetary prize tournaments only increase the productivity of teams at the top. We interpret these results through a theoretical framework that makes precise when the provision of team-based incentives crowds out the productivity enhancing effect of social connections under team production. |
| Keywords: | rank incentives, team-based incentives, teams, tournaments |
| JEL: | D23 J33 M52 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6279&r=cbe |
| By: | Ghazala Azmat; Nagore Iriberri |
| Abstract: | This paper studies the effect of providing relative performance feedback information on individuals' performance and affective response, under both piece-rate and flat-rate incentives. In a laboratory setup, agents perform a real effort task and when receiving feedback, they are asked to rate their happiness, arousal and feeling of dominance. Control subjects learn only their absolute performance, while the treated subjects additionally learn the average performance in the session. Under piece-rate, performance is 17 percent higher when relative performance feedback is provided. Furthermore, although feedback increases the performance independent of the content (i.e., performing above or below the average), the content is determinant for the affective response. When subjects are treated, the inequality in the happiness and the feeling of dominance between those subjects performing above and below the average increases by 8 and 6 percentage points, respectively. Under flat-rate, we do not find any effect on either of the outcome variables. |
| Keywords: | Relative performance, feedback, piece-rate, flat-rate, happiness |
| JEL: | C91 M52 D03 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1116&r=cbe |
| By: | Thöni, Christian (University of St. Gallen); Gächter, Simon (University of Nottingham) |
| Abstract: | Substantial evidence suggests the behavioral relevance of social preferences and also the importance of social influence effects ("peer effects"). Yet, little is known about how peer effects and social preferences are related. In a three-person gift-exchange experiment we find causal evidence for peer effects in voluntary cooperation: agents' efforts are positively related despite the absence of material payoff interdependencies. We confront this result with major theories of social preferences which predict that efforts are unrelated, or negatively related. Some theories allow for positively-related efforts but cannot explain most observations. Conformism, norm following and considerations of social esteem are candidate explanations. |
| Keywords: | social preferences, voluntary cooperation, peer effects, reflection problem, gift exchange, conformism, social norms, social esteem |
| JEL: | C92 D03 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6277&r=cbe |
| By: | Timothy N. Cason; Sau-Him Paul Lau; Vai-Lam Mui |
| Abstract: | History-dependent strategies are often used to support cooperation in repeated game models. Using the indefinitely repeated common-pool resource assignment game and a perfect stranger experimental design, this paper reports novel evidence that players who have successfully used an efficiency-enhancing turn-taking strategy will teach other players in subsequent supergames to adopt this strategy. We find that subjects engage in turn taking frequently in both the Low Conflict and the High Conflict treatments. Prior experience with turn taking significantly increases turn taking in both treatments. Moreover, successful turn taking often involves fast learning, and individuals with turn taking experience are more likely to be teachers than inexperienced individuals. The comparative statics results show that teaching in such an environment also responds to incentives, since teaching is empirically more frequent in the Low Conflict treatment with higher benefits and lower costs. |
| Keywords: | Learning, Teaching, Assignment Game, Laboratory Experiment, Repeated Games, Turn Taking, Common-Pool Resources |
| JEL: | C73 C91 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1267&r=cbe |
| By: | Görlitz, Katja (RWI); Tamm, Marcus (RWI) |
| Abstract: | This paper addresses the question to which extent the complementarity between education and training can be attributed to differences in observable characteristics, i.e. to individual, job and firm specific characteristics. The novelty of this paper is to analyze previously unconsidered characteristics, in particular, personality traits and tasks performed at work which are taken into account in addition to the standard individual specific determinants. Results show that tasks performed at work are strong predictors of training participation while personality traits are not. Once working tasks and other job related characteristics are controlled for, the skill gap in training participation drops considerably for off-the-job training and vanishes for on-the-job training. |
| Keywords: | training, personality traits, working tasks, Oaxaca decomposition |
| JEL: | I21 J24 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6278&r=cbe |