44 Pages Posted: 6 Oct 2015
Date Written: September 2015
We experimentally study ways in which the social preferences of individuals and groups affect performance when faced with relative incentives. We also identify the mediating role that communication and leadership play in generating these effects. We find other-regarding workers tend to depress efforts by 15% on average. However, selfish workers are nearly three times more likely to lead workers to coordinate on minimal efforts when communication is possible. Hence, the other-regarding composition of a team of workers has complex consequences for organizational performance.
Keywords: Social Preferences, Relative Performance, Collusion, Leadership
Suggested Citation: Suggested Citation
Hernandez-Lagos, Pablo and Minor, Dylan and Sisak, Dana, Do People Who Care About Others Cooperate More? Experimental Evidence from Relative Incentive Pay (September 2015). Harvard Business School Strategy Unit Working Paper No. 16-040. Available at SSRN: https://ssrn.com/abstract=2669665 or http://dx.doi.org/10.2139/ssrn.2669665