Competitive versus cooperative incentives in team production with heterogeneous agents

Arbeitspapier

A debate among practicing managers is whether to use cooperative or competitive incentives for team production. While competitive incentives may drive individual effort higher, they may also lead to less help and more sabotage; an issue exacerbated when team members' abilities are varied. Using a lab experiment, we examine how increasing competitive incentives affects performance as team composition changes. We find that competitive incentives generally underperform noncompetitive incentives and a larger bonus does not generate enough effort to compensate for a loss in help. Our results help understand better how to balance out individual versus team rewards and how firms could structure teams when employees have heterogeneous abilities.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2021-26

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Group Behavior ; Microeconomic Behavior: Underlying Principles
• Subject: contest ; help and sabotage ; team composition ; incentive structure

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dutcher, Glenn E. ; Oexl, Regine ; Ryvkin, Dmitry ; Salmon, Tim
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/250148
• Last update: 10.03.2025, 11:42 AM CET