Citation

Discussion Paper Details

Please find the details for DP5358 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Evolution of Cooperative Norms: Evidence from a Natural Field Experiment

Author(s): Oriana Bandiera, Iwan Barankay and Imran Rasul

Publication Date: November 2005

Keyword(s): cooperation, group exercise and individual exposure

Programme Area(s): Public Economics

Abstract: We document the establishment and evolution of a cooperative norm among workers using evidence from a natural field experiment on a leading UK farm. Workers are paid according to a relative incentive scheme under which increasing individual effort raises a worker's own pay but imposes a negative externality on the pay of all co-workers, thus creating a rationale for cooperation. As a counterfactual, we analyse worker behaviour when workers are paid piece rates and thus have no incentive to cooperate. We find that workers cooperate more as their exposure to the relative incentive scheme increases. We also find that individual and group exposure are substitutes, namely workers who work alongside colleagues with higher exposure cooperate more. Shocks to the workforce in the form of new worker arrivals disrupt cooperation in the short term but are then quickly integrated into the norm. Individual exposure, group exposure, and the arrival of new workers have no effect on productivity when workers and paid piece rates and there is no incentive to cooperate.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5358

Bibliographic Reference

Bandiera, O, Barankay, I and Rasul, I. 2005. 'The Evolution of Cooperative Norms: Evidence from a Natural Field Experiment'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5358