Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34604 
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers No. 2927
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Teamwork and cooperation between workers can be of substantial value to a firm, yet the level of worker cooperation often varies between individual firms. We show that these differences can be the result of labor market competition if workers have heterogeneous preferences and preferences are private information. In our model there are two types of workers: selfish workers who only respond to monetary incentives, and conditionally cooperative workers who might voluntarily provide team work if their co-workers do the same. We show that there is no pooling in equilibrium, and that workers self-select into firms that differ in their incentives as well as their resulting level of team work. Our model can explain why firms develop different corporate cultures in an ex-ante symmetric environment. Moreover, the results show that, contrary to first intuition, labor market competition does not destroy but may indeed foster within-firm cooperation.
Document Type: 
Working Paper

Files in This Item:
File
Size
292.23 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.