How Disaggregated Performance Reports Affect Team Cooperation: Content Matters?

Abstract

This study investigates the effects of the specific content of disaggregated performance reports on team cooperation over periods, when agents' rewards are based on team performance. In a disaggregated performance report teammates' individual performance information is shared among partners. Some accounting researchers suggest that disaggregated performance reports increase cooperation, by reducing noise at team level. Others claim that disaggregated reports increase free riding and influence agents' cognition by emphasizing boundaries between teammates. The present study aims to reconcile these seemingly contradictory results by analyzing simultaneously the effects of disaggregated reports containing different kinds of performance information (agents' actions vs. payoffs). By conducting an experiment we found that the content of disaggregated performance reports directly affects team cooperation. A disaggregated performance report that displays both agents' actions and payoffs decreases cooperation over periods, also as a consequence of social comparison among teammates. In contrast, if disaggregated performance reports show only teammates' actions, then free riding decreases.

Keywords: Disaggregated Performance Report, Cooperation, Social Comparison, Experiment

JEL Classification: M41, M49