An Experimental Study of Career Concerns in Groups

43 Pages Posted: 9 Nov 2022 Last revised: 2 Jan 2023

See all articles by Chen Wei

Chen Wei

Washington University in St. Louis

Date Written: January 1, 2023

Abstract

This paper studies career concerns in groups where agents can allocate effort between their own tasks and other group members' tasks. We first theoretically investigate how agents allocate effort when they have career concerns. Then, we compare their decisions in a scenario where firms in the labor market can observe their individual performance and in another scenario where only the aggregate performance is observed. Consistent with theoretical predictions, our experimental results show that agents tend to allocate more effort to their own tasks when they have career concerns. Additionally, aggregate performance is higher when the labor market observes each agent's individual performance. However, agents are more likely to support other group members when their aggregate performance is observed by the labor market. We discuss the implications of these results for different organizations.

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 (January 1, 2023). 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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