Date of this Version
The B.E. Journal of Economic Analysis & Policy
We document the establishment and evolution of a cooperative norm among workers using evidence from a natural field experiment on a leading UK farm. Workers are paid according to a relative incentive scheme under which increasing individual effort raises a worker's own pay but imposes a negative externality on the pay of all co-workers, thus creating a rationale for cooperation. As a counterfactual, we analyze worker behavior when workers are paid piece rates and thus have no incentive to cooperate.We find that workers cooperate more as their exposure to the relative incentive scheme increases. We also find that individual and group exposure are substitutes, namely workers who work alongside colleagues with higher exposure cooperate more. Shocks to the workforce in the form of new worker arrivals disrupt cooperation in the short term but are then quickly integrated into the norm. Individual exposure, group exposure, and the arrival of new workers have no effect on productivity when workers and paid piece rates and there is no incentive to cooperate.
The final publication is available at www.degruyter.com.
cooperation, group exposure, individual exposure
Bandiera, O., Barankay, I., & Rasul, I. (2006). The Evolution of Cooperative Norms: Evidence From a Natural Field Experiment. The B.E. Journal of Economic Analysis & Policy, 5 (2), http://dx.doi.org/10.2202/1538-0637.1484
Economics Commons, Management Sciences and Quantitative Methods Commons, Organizational Behavior and Theory Commons
Date Posted: 27 November 2017
At the time of publication, author Iwan Barankay was affiliated with the University of Essex. Currently, he is a faculty member at the Management Department at the University of Pennsylvania.