Working Paper: CEPR ID: DP14356
Authors: Farzana Afridi; Amrita Dhillon; Sherry Xin Li; Swati Sharma
Abstract: Production processes are often organized in teams, yet there is limited evidence on whether and how social connections and financial incentives affect productivity in tasks that require coordination among workers. We simulate assembly line production in a lab-in-the-field experiment in which workers exert real effort in a minimum-effort game in teams whose members are either socially connected or unconnected and are paid according to the group output. We find that group output increases by 18%, and coordination improves by 30-39%when workers are socially connected with their co-workers. These findings can plausibly be explained by the higher levels of pro-social motivation between co-workers in socially connected teams.
Keywords: caste-based networks; social incentives; financial incentives; minimum effort game; output coordination
JEL Codes: C93; D20; D22; D24; J33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social connections (Z13) | group output (C92) |
| social connections (Z13) | coordination (P11) |
| social connections (Z13) | effort levels (D29) |
| effort levels (D29) | group output (C92) |
| financial incentives (M52) | group output (C92) |
| financial incentives (M52) | coordination (P11) |
| social connections (Z13) | reduction in wasted output (E23) |