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

Philip Babcock; Kelly Bedard; Gary Charness; John Hartman; Heather Royer

doi:10.3386/w16687

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

Philip Babcock, Kelly Bedard, Gary Charness, John Hartman & Heather Royer

Working Paper 16687

DOI 10.3386/w16687

Issue Date January 2011

Revision Date June 2012

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.

We would like to thank Ted Bergstrom, Tom Chang, Uri Gneezy, Michael Kuhn, Peter Kuhn, Justin Sydnor, and participants at the Southwest Economic Theory Conference 2011, Southern California Conference in Applied Microeconomics 2011, the Society for Labor Economics 2011, University of Stavanger Conference on Work and Family, and Yale University for helpful comments. We particularly thank Chris Clontz for assistance with UCSB Recreation Center usage information. We would also like to thank Allison Bauer, Stefanie Fischer, Ryan Knefel, Jennifer Milosch, Ruth Morales, Bonnie Queen, Ryan Smart, Carina Rammelkamp, Stefanie Fischer, George Tam, and Kevin Welding for excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
MARC RIS BibTeΧ
- January 13, 2011
- December 5, 2011

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

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