Telecommuting policies have been increasingly adopted by employers. The bene…ts of telecommuting from the employer's perspective include direct cost-saving from not having to house employees in an o¢ ce and indirect cost-saving through reduced turnover associated with increased employee satisfaction. The downside is the perceived opportunity for shirking outside of the traditional workplace, a problem which is potentially exacerbated if employees are placed into telecommuting teams. Using a controlled experiment which randomly assigned subjects to participate in the laboratory (non-telecommuters) or to participate online in a location of their choice (telecommuters), we directly test whether telecommuters are more likely to free ride when in teams and whether or not the locational composition of the team in ‡uences this outcome. We …nd no evidence of free-riding in teams for either telecommuters or non-telecommuters. We also …nd that variation in output when a worker is paired in a traditional team versus a telecommuting team can be attributed to the beliefs subjects have about their teammates productivity. The last result leads directly to policy implications for managers. JEL Codes: J21 J24 J28 C90

Punishment has been shown to be an effective reinforcement mechanism. Intentional or not, punishment will likely generate spillover effects that extend beyond one's immediate decision environment, and these spillovers are not as well understood. We seek to understand these secondary spillover effects in a controlled lab setting using a standard social dilemma: the voluntary contributions mechanism. We find that spillovers occur when others observe punishment outside their own social dilemma. However, the direction of the spillover effect depends crucially on personal punishment history and whether one is personally exempt from punishment or not.

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