Peer pressure and productivity: The role of observing and being observed

Abstract

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. www.econstor.eu 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 SIZA 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. Peer effects arise in situations where workers observe each other's work activity. In this paper we disentangle the effect of observing a peer from that of being observed by a peer, by setting up a real effort experiment in which we manipulate the observability of performance. In particular, we randomize subjects into three groups: in the first one subjects are observed by another subject, but do not observe anybody; in the second one subjects observe somebody else's performance, but are not observed by anybody; in the last group subjects work in isolation, neither observing, nor being observed. We consider both a piece rate compensation scheme, where pay depends solely on own performance, and a team compensation scheme, where pay also depends on the performance of other team members. Overall, we find some evidence that subjects who are observed increase productivity at least initially when compensation is team based, while we find that subjects observing react to what they see in a non-linear but monotonic way when compensation is based only on own performance. JEL Classification:D03, J24, M52, M59

Effort reduction of employer‐to‐employer changers: Empirical evidence from football

“…Statistics of the team and teammates are incorporated as a fourth set of covariates. Because the outcome of football is a team production function, teammates influence each other's performance (Arcidiacono, Kinsler, & Price, ; Georganas, Tonin, & Vlassopoulos, ; Idson & Kahane, ). To control for performance and their teammates' effort, information on the team's (minus the player of observation) average running distance, average age, average height, average tenure, days of rest, and minutes played (to control for sent offs) are included.…”

Social Networks and Peer Effects at Work

“…Finally, in the context of the simultaneous treatment, our experimental design cannot discriminate between a pure rivalry effect (observing peers) and an image effect (being observed by peers). However, experimental evidence suggests the rivalry effect most likely dominates (Georganas et al, 2013). Our results nevertheless highlight the fact that men and women appear to behave differently in a network setting.…”

Peer effects and incentives

“…However, in practice, agents often do not know the incomes or payo¤s of their peers but mutually observe each other's performance. 1 Empirical studies show that this performance information strongly in ‡uences workers' e¤ort choices (Falk and Ichino 2006, Mas and Moretti 2009, Gächter et al 2013, Georganas et al 2013. From a theoretical perspective, such peer e¤ects have to be kept in mind by a principal when designing optimal incentives in a multi-agent setting.…”