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Do people who care about others cooperate more? Experimental evidence from relative incentive pay

Published online by Cambridge University Press:  14 March 2025

Pablo Hernandez-Lagos ,
Dylan Minor  and
Dana Sisak
Pablo Hernandez-Lagos*
Affiliation:
New York University Abu Dhabi, Abu Dhabi, United Arab Emirates
Dylan Minor
Affiliation:
Northwestern University, Evanston, IL, USA
Dana Sisak
Affiliation:
Erasmus University Rotterdam, Rotterdam, The Netherlands Tinbergen Institute, Rotterdam, The Netherlands
*
[email protected]
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Abstract

We experimentally study ways in which social preferences affect individual and group performance under indefinitely repeated relative incentives. We also identify the mediating role that communication and leadership play in generating these effects. We find other-regarding individuals tend to depress efforts by 15% on average. However, selfish individuals are nearly three times more likely to lead players to coordinate on minimal efforts when communication is possible. Hence, the other-regarding composition of a group has complex consequences for organizational performance.

Keywords

Social preferencesRelative performanceCooperationLeadership

JEL classification

C7: Game Theory and Bargaining Theory C9: Design of Experiments M52: Compensation and Compensation Methods and Their Effects
Type
Original Paper
Information
Experimental Economics , Volume 20 , Issue 4 , December 2017 , pp. 809 - 835
Copyright
Copyright © 2017 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-017-9512-9) contains supplementary material, which is available to authorized users.

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