Fehr, Ernst, and Simon Gächter, (2002). "Altruistic punishment in humans," Nature 415(6868): 137.
Shows experimentally that the altruistic punishment of defectors is a powerful force for cooperation. Cooperation flourishes if altruistic punishment is possible, and breaks down if it is ruled out. The evidence indicates that negative emotions towards defectors are the proximate mechanism behind altruistic punishment.
Hamilton, Barton H., Jack A. Nickerson, and Hideo Owan, (2003). "Team incentives and worker heterogeneity: An empirical analysis of the impact of teams on productivity and participation," Journal of Political Economy 111(3): 465-497.
Identifies and evaluates rationales for team participation and for the effects of team composition on productivity using novel data from a garment plant that shifted from individual piece rate to group piece rate production over three years. The adoption of teams at the plant improved worker productivity by 14 percent on average.
Akerlof, George A and Rachel E. Kranton, (2005). "Identity and the Economics of Organizations," Journal of Economic Perspectives 19(1): 9-32.
Develops a theoretical model of identity in organizations, and discusses how creating a sense of identity can improve the functioning of teams, inducing members to place the group's interests above their own. Illustrates the model with examples from the military and civilian workplaces.
Mas, Alexandre, and Enrico Moretti, (2009). "Peers at work," American Economic Review 99(1): 112-45.
Studies high-frequency data on the productivity of cashiers in a large supermarket chain. Finds strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. Worker effort is positively related to the productivity of workers who see them but not workers who do not see them.
Babcock, Philip., Kelly Bedard, Gary Charness, John Hartman, and Heather Royer, (2015). "Letting down the team? Social effects of team incentives," Journal of the European Economic Association, 13(5): 841-870.
Estimates social effects of incentivizing people in teams in three field experiments featuring exogenous team formation and opportunities for repeated social interactions. Finds positive effects of working in teams on productivity that appear to be caused by peer pressure.
Kandel, Eugene, and Edward P. Lazear. 1992. “Peer Pressure and Partnerships”.Journal of Political Economy(August): 801–817.
Theoretically explores how peer pressure operates and how factors such as profit sharing, shame, guilt, norms, mutual monitoring, and empathy interact to create incentives in the firm. The argument that Japanese firms enjoy team spirit because compensation is linked to overall profitability is analyzed. An explanation for the prevalence of partnerships among individuals in similar occupations is provided.
Falk, Armin, and Andrea Ichino (2006): “Clean Evidence on Peer Effects,” Journal of Labor Economics, 24, 39-58.
Experimentally investigates the effect of one worker’s job performance on the performance of other workers who can observe that performance. Results show evidence of peer effects because (a) workers’ output is more similar to each other when they can see each other’s output, and (b) working in the presence of others raises productivity.
Bedard, Kelly, Philip Babcock, Gary Charness, John Hartman, and Heather Royer (2015). “Letting Down the Team? Evidence of Social Effects of Teams”Journal of the European Economic Association: 841-870.
Experimentally shows that working in a team increases productivity by 9%–17% relative to an individual incentive treatment, even though the individual incentive yields a higher private return. Observed patterns suggest that this effect operates through guilt or social pressure as opposed to pure altruism.
Bašić, Zvonimi, Parampreet C. Bindra, Daniela Glätzle-Rützler, Angelo Romano, Matthias Sutter and Claudia Zoller, 2021. "The Roots of Cooperation," ECONtribute Discussion Papers Series 097, University of Bonn and University of Cologne, Germany
Many studies, including Fehr and Gächter (2002) have shown that teams perform better when we give members the opportunity to punish each other. But is the desire to punish free-riders innate or learned? To shed light on this question, these authors study the development of cooperation in 929 children, aged 3 to 6. They show that third-party punishment has a powerful, positive effect on co-operation even at very young ages.
Tajfel, Henri, Michael Billig, R. Bundy, and Claude L. Flament. 1971. “Social Categorization and Inter-Group Behavior.” European Journal of Social Psychology, 1(2): 149–178.
Classic social psychology study that demonstrates effects of social categorization (‘Identity”) on intergroup behavior. Identity leads group members to discriminate against outsiders, even in the absence of any obvious economic incentives or previously existing attitudes of hostility.
Eckel, Catherine C., and Philip J. Grossman. 2005. “Managing Diversity by Creating Team Identity.” Journal of Economic Behavior and Organization, 58(3): 371–92.
Explores the extent to which creating team identity can deter shirking and free-riding behavior in a team production setting. The authors find that actions designed to enhance team identification – like working together on an unrelated and unpaid project prior to a team production task-- contribute to higher levels of team cooperation.
Chan, C. David, (2016). "Teamwork and Moral Hazard: Evidence from the Emergency Department,” Journal of Political Economy, vol. 124, no. 3.
Investigates how teamwork may reduce moral hazard by joint monitoring and management.
Fehr, Ernst and Tony Williams, (2018). “Social Norms, Endogenous Sorting and the Culture of Cooperation,” IZA Discussion paper number 11457.
Shows that welfare-enhancing peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior.
Charness, Gary and Yan Chen. Social Identity, Group Behavior, and Teams Annual Review of Economics Vol. 12:691-713 (August 2020)
While strong social identities can lead to conflict and violence, the authors review the literature on how positive identities and pride about one's social identity to be reinforced for the greater good. Recent work suggests that some forms of team competition can induce greater effort, which can be applied to areas such as microlending, charitable giving, and organization of the gig economy.
Castagnetti, Alessandro and Eugenio Proto. 2020 “Anger and Strategic Behavior: A Level-k Analysis” IZA discussion paper No. 13661
While anger can be helpful in combating free-riding in groups, the authors show that experimentally-induced anger impairs subjects’ capacity to think strategically in a ‘beauty contest’ game. Interestingly, sadness (a different, negative emotion) does not have the same effect.
Frederiksen, Anders, Daniel Baltzer Schjødt Hansen, Colleen Flaherty Manchester 2022. Does Group-Based Incentive Pay Lead To Higher Productivity? Evidence from a Complex and Interdependent Industrial Production Process IZA discussion paper no. 14986
The authors assess the effects of introducing group-based performance pay in a modern industrial production setting using. Performance increased by 19 percent, with three quarters coming from increased performance of existing workers and the remaining from selection. The program was designed to create trust, a common goal, and a shared identity, all of which limited freeriding within the groups.
Alan, Sule, Gozde Corekcioglu and Matthias Sutter 2022 Improving Workplace Climate in Large Corporations: A Clustered Randomized Intervention Quarterly Journal of Economics, forthcoming.
The authors use a field experiment on 3,000 headquarters employees of 20 large corporations in Turkey to evaluate the impact of a training program that encourages prosocial behavior and the use of professional language in the workplace, with a focus on leaders’ behavior and leader-subordinate interactions. They find that the program reduced leaders’ separation rates. Further, employees in treated corporations were less inclined to engage in toxic competition, exhibited higher reciprocity toward each other, reported higher workplace satisfaction.
Ai, Wei, Yan Chen, Qiaozhu Mei, Jieping Ye, and Lingyu Zhang Putting Teams into the Gig Economy: A Field Experiment at a Ride-Sharing Platform Management Science, Vol. 69, No. 9: 5336-5353.
While gig work offers high levels of autonomy and flexibility, a common cause of turnover is the lack of work identity and coworker bonds. To address this concern, the authors randomly assign ride-sharing workers to a team formation and inter-team contest field experiment. They find that treated drivers work longer hours and earn 12% higher revenue during and after the contest. They argue that platform designers can leverage team identity and team contests to increase revenue and worker engagement in a gig economy.