Peer pressure and productivity: The role of observing and being observed

Georganas, S., Tonin, M. & Vlassopoulos, M. (2015). Peer pressure and productivity: The role of observing and being observed. Journal of Economic Behavior and Organization, 117, pp. 223-232. doi: 10.1016/j.jebo.2015.06.014

[img] Text - Accepted Version
Restricted to Repository staff only until 30 June 2018.
Available under License : See the attached licence file.

Download (422kB) | Request a copy
[img]
Preview
Text (Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence) - Other
Download (201kB) | Preview

Abstract

Peer effects arise in situations where workers observe each others’ work activity. In this paper, we disentangle the effect of observing a peer from that of being observed by a peer, by setting up a real effort experiment in which we manipulate the observability of performance. In particular, we randomize subjects into three groups: in the first one subjects are observed by another subject, but do not observe anybody; in the second one subjects observe somebody else's performance, but are not observed by anybody; in the last group subjects work in isolation, neither observing, nor being observed. To assess the importance of payoff externalities in the emergence of peer effects, we consider both a piece rate compensation scheme, where pay depends solely on own performance, and a team compensation scheme, where pay also depends on the performance of other team members. Overall, we find some evidence that subjects who are observed increase productivity at least initially when compensation is team based, while we find that subjects observing react to what they see when compensation is based only on own performance.

Item Type: Article
Additional Information: © 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords: Peer effects; Piece rate; Team incentives; Real-effort experiment
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: School of Social Sciences > Department of Economics
URI: http://openaccess.city.ac.uk/id/eprint/12714

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics