Mutual Monitoring in Teams: Theory and Experimental Evidence on the Importance of Reciprocity

27 Pages Posted: 8 May 2006

See all articles by Jeffrey P. Carpenter

Jeffrey P. Carpenter

Middlebury College - Department of Economics; IZA Institute of Labor Economics

Samuel Bowles

Santa Fe Institute; University of Massachusetts

Herbert Gintis

Santa Fe Institute; Central European University

Date Written: April 2006

Abstract

Monitoring by peers is often an effective means of attenuating incentive problems. Most explanations of the efficacy of mutual monitoring rely either on small group size or on a version of the Folk theorem with repeated interactions which requires reasonably accurate public information concerning the behavior of each player. We provide a model of team production in which the effectiveness of mutual monitoring depends not on these factors, but rather on strong reciprocity: the willingness of some team members to engage in the costly punishment of shirkers. This alternative does not require small group size or public signals. An experimental public goods game provides evidence for the behavioral relevance of strong reciprocity in teams.

Keywords: team production, public good, monitoring, punishment, experiment

JEL Classification: C92, H41, J41, J54, Z13

Suggested Citation

Carpenter, Jeffrey P. and Bowles, Samuel and Gintis, Herbert, Mutual Monitoring in Teams: Theory and Experimental Evidence on the Importance of Reciprocity (April 2006). IZA Discussion Paper No. 2106. Available at SSRN: https://ssrn.com/abstract=900822

Jeffrey P. Carpenter (Contact Author)

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
802-443-3241 (Phone)
802-443-2084 (Fax)

HOME PAGE: http://community.middlebury.edu/~jcarpent/index.ht

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Samuel Bowles

Santa Fe Institute ( email )

1399 Hyde Park Rd
Santa Fe, NM 87501
United States
505-984-8800 (Phone)
505-982-0565 (Fax)

HOME PAGE: http://www.santafe.edu

University of Massachusetts ( email )

Amherst, MA 01002
United States
413-545-2590 (Phone)

HOME PAGE: http://www-unix.oit.umass.edu/~bowles/

Herbert Gintis

Santa Fe Institute ( email )

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Central European University

Nador utca 9
Budapest, H-1051
Hungary
413-586-7756 (Phone)

HOME PAGE: http://www-unix.oit.umass.edu/~gintis

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