Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180539 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11521
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Production processes are often organised in teams, yet there is limited evidence on whether and how social connections and financial incentives affect productivity in tasks that require coordination among workers. We simulate assembly line production in a lab-in-the-field experiment in which workers exert real effort in a minimum-effort game in teams whose members are either socially connected or unconnected and are paid according to the group output. We find that group output increases by 15% and wasted individual output is lower by 30% when workers are socially connected with their co-workers. Unlike the findings of existing research, increasing the power of group-based financial incentives does not reduce the positive effect of social connections. Our results are driven by men whose average productivity is significantly lower than that of women. These findings can be explained by pro-social behavior of workers in socially connected teams.
Subjects: 
caste-based networks
social incentives
financial incentives
minimum effort game
coordination
trust
JEL: 
C93
D20
D22
D24
J33
Document Type: 
Working Paper

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