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Interactions between Workers and the Technology of Production: Evidence from Professional Baseball

33 Pages Posted: 7 Nov 2007  

Eric D. Gould

Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Eyal Winter

Hebrew University of Jerusalem - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2007

Abstract

This paper examines how the effort choices of workers within the same firm interact with each other. In contrast to the existing literature, we show that workers can affect the productivity of their co-workers based on income maximization considerations, rather than relying on behavioral considerations such as peer pressure, social norms, and shame. Theoretically, we show that a worker's effort has a positive effect on the effort of co-workers if they are complements in production, and a negative effect if they are substitutes. The theory is tested using panel data on the performance of baseball players from 1970 to 2003. The empirical analysis shows that a player's batting average significantly increases with the batting performance of his peers, but decreases with the quality of the team's pitching. Furthermore, a pitcher's performance increases with the pitching quality of his teammates, but is unaffected by the batting output of the team. These results are inconsistent with behavioral explanations which predict that shirking by any kind of worker will increase shirking by all fellow workers. The results are consistent with the idea that the effort choices of workers interact in ways that are dependent on the technology of production. These findings are robust to controlling for individual fixed-effects, and to using changes in the composition of one's co-workers in order to produce exogenous variation in the performance of one's peers.

Keywords: peer effects, team production, externalities

JEL Classification: J2

Suggested Citation

Gould, Eric D. and Winter, Eyal, Interactions between Workers and the Technology of Production: Evidence from Professional Baseball (October 2007). IZA Discussion Paper No. 3096. Available at SSRN: https://ssrn.com/abstract=1028209

Eric D. Gould (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3247 (Phone)
+972 2 581 6071 (Fax)

HOME PAGE: https://sites.google.com/site/edgould

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Eyal Winter

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 658 4154 (Phone)
+972 2 651 3681 (Fax)

HOME PAGE: http://www.ma.huji.ac.il/%7Emseyal/

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