The Causes of Peer Effects in Production: Evidence from a Series of Field Experiments

30 Pages Posted: 12 Aug 2016 Last revised: 13 Aug 2016

See all articles by John J. Horton

John J. Horton

New York University (NYU) - Department of Information, Operations, and Management Sciences

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: June 24, 2016

Abstract

Workers respond to the output choices of their peers. What explains this well documented phenomenon of peer effects? Do workers value equity, fear punishment from equity-minded peers, or does output from peers teach them about employers’ expectations? We test these alternative explanations in a series of field experiments. We find clear evidence of peer effects, as have others. Workers raise their own output when exposed to high-output peers. They also punish low-output peers, even when that low output has no effect on them. They may be embracing and enforcing the employer’s expectations. (Exposure to employer-provided work samples influences output much the same as exposure to peer-provided work.) However, even when employer expectations are clearly stated, workers increase output beyond those expectations when exposed to workers producing above expectations. Overall, the evidence is strongly consistent with the notion that peer effects are mediated by workers’ sense of fairness related to relative effort.

Keywords: Peer Effects, Productivity, Effort, Field Experiments

JEL Classification: J01, J24, J3

Suggested Citation

Horton, John J. and Zeckhauser, Richard J., The Causes of Peer Effects in Production: Evidence from a Series of Field Experiments (June 24, 2016). HKS Working Paper No. 16-027, Available at SSRN: https://ssrn.com/abstract=2820757 or http://dx.doi.org/10.2139/ssrn.2820757

John J. Horton

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