An Experimental Study of Career Concerns in Groups

36 Pages Posted: 9 Nov 2022

See all articles by Chen Wei

Chen Wei

Washington University in St. Louis

Date Written: October 31, 2022

Abstract

This paper studies career concerns in groups where workers can allocate effort between their own tasks and other group members' tasks. We first theoretically investigate how workers allocate effort when they have career concerns. Then, we study their decisions when the labor market can only observe their aggregate performance rather than their individual performance. Consistent with theoretical predictions, our experimental results show that workers tend to allocate more effort to their own tasks when they have career concerns. Additionally, workers are more likely to support others when their aggregate performance is observed by the labor market. We also observe a number of inconsistencies between the data and theoretical predictions. For example, workers allocate more effort to support others in the experiment than that in theory. We apply the quantal response equilibrium (QRE) to explain these deviations.

Keywords: Career Concerns in Groups, Trade-offs, Group Performance, Laboratory Experiment, Quantal Response Equilibrium

JEL Classification: C70, C9, D22, D41, D70, D82, J30, M50

Suggested Citation

Wei, Chen, An Experimental Study of Career Concerns in Groups (October 31, 2022). Available at SSRN: https://ssrn.com/abstract=4262920 or http://dx.doi.org/10.2139/ssrn.4262920

Chen Wei (Contact Author)

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

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