Strong reciprocity and team production: Theory and evidence

Carpenter, Jeffrey P.; Bowles, Samuel; Gintis, Herbert; Hwang, Sung‐Ha

doi:10.1016/j.jebo.2009.03.011

“…As a result, the key questions for these communities focus on cooperation in jointly harvesting the resource and sharing the fruits of the harvest. This is, in effect, a team production problem for which the linear public-goods game is a reasonable approach (Alchian and Demsetz 1972, Croson 2001, Carpenter et al 2009). …”

Section: Introductionmentioning

confidence: 99%

Sharing as risk pooling in a social dilemma experiment

Cherry¹,

Howe²,

Murphy³

2015

E&S

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ABSTRACT. In rural economies with missing or incomplete markets, idiosyncratic risk is frequently pooled through informal networks. Idiosyncratic shocks, however, are not limited to private goods but can also restrict an individual from partaking in or benefiting from a collective activity. In these situations, a group must decide whether to provide insurance to the affected member. We describe results of a laboratory experiment designed to test whether a simple sharing institution can sustain risk pooling in a social dilemma with idiosyncratic risk. We tested whether risk could be pooled without a commitment device and, separately, whether effective risk pooling induced greater cooperation in the social dilemma. We found that even in the absence of a commitment device or reputational considerations, subjects voluntarily pooled risk, thereby reducing variance in individual earnings. In spite of effective risk pooling, however, cooperation in the social dilemma was unaffected.

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“…We model the provision of effort by borrowing complementary aspects of the existing theoretical literature (e.g., Kandel and Lazear, 1992;Banerjee et al, 1994;Rotemberg, 1994;Besley and Coate, 1995;Carpenter et al, 2009). Consider first the case in which the "manager" offers a common fixed wage, w, to the workers of her firm who are indexed i = 1...N and whose marginal productivity is constant at q units of output per unit of effort.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Profit Sharing and Peer Reporting

Carpenter

¹

,

Robbett

²

,

Akbar

³

2018

Self Cite

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Profit Sharing and Peer ReportingIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACT Profit Sharing and Peer ReportingDespite the "1/N problem" associated with profit sharing, the empirical literature finds that sharing profits with workers has a positive impact on work team and firm performance. We examine one possible resolution to this puzzle by observing that, although the incentive to work harder under profit sharing is weak, it might be sufficient to motivate workers to report each other for shirking, especially if the workers are reciprocally-minded. Our model provides the rationale for this conjecture and we discuss the results of an experiment that confirms that profit sharing is most effective when peer reporting is possible.

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“…This indicates that firms may find ways to mitigate or solve the free rider problem. Possible ways to overcome the free rider problem are repeated games (Che andYoo 2001, MacLeod 1988), mutual monitoring and peer pressure (Carpenter et al 2009, Freeman et al 2010, Kandel and Lazear 1992, Knez and Simester 2001, reciprocity and co-worker altruism (Cornelissen et al 2014, Rotemberg 1994, and production technologies characterized by a high degree of worker interdependence (Adams 2006, Heywood andJirjahn 2009). …”

Section: Objective Firm Characteristics and The Incentive Effects Of mentioning

confidence: 99%

The adoption and termination of profit sharing for employees: does management’s attitude play a role?

Jirjahn

¹

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may University of TrierAbstract: Examinations on the determinants of profit sharing usually focus on objective firm characteristics. Using data from manufacturing firms in Germany, this study shows that managers' subjective attitudes towards profit sharing also play an important role in the adoption and termination of this payment scheme. Positive management attitudes are associated with an increased likelihood of adopting profit sharing. While to some extent this entails failed experimentation, positive managerial attitudes also substantially contribute to a sustained use of profit sharing. The pattern of results holds even when controlling for a variety of objective firm characteristics.JEL Classification: J33, M52.

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Strong reciprocity and team production: Theory and evidence

Cited by 100 publications

References 59 publications

Sharing as risk pooling in a social dilemma experiment

Sharing as risk pooling in a social dilemma experiment

Profit Sharing and Peer Reporting

The adoption and termination of profit sharing for employees: does management’s attitude play a role?

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