Working Paper: CEPR ID: DP3834
Authors: Armin Falk; Andrea Ichino
Abstract: While confounding factors typically jeopardise the possibility of using observational data to measure peer effects, field experiments offer the possibility of obtaining clean evidence. In this Paper we measure the output of four randomly selected groups of individuals who were asked to fill letters in envelopes, with a remuneration completely independent of output. For two of these groups the output of peers was exogenously manipulated (low or high) by making individuals aware of the number of letters previously produced by artificial colleagues. In the third group individuals were set up to work one in front of the other, while the fourth group gave the baseline output for independent not manipulated work. Our first finding is that effort of the less productive workers reacts in a sizeable and statistically significant way to peer pressure. Second, there is strong evidence of peer effects when individuals work in pairs. Third, these peer effects work in the direction of making the least productive individuals work harder, thereby increasing overall productivity.
Keywords: Field experiments; Incentives; Peer effects
JEL Codes: D20; J20; K40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| peer output (G35) | individual productivity levels (D29) |
| peer pressure (C92) | effort of less productive workers (J29) |
| working in pairs (C92) | peer effects (C92) |
| individuals influence each other’s output (C67) | peer effects (C92) |
| peer influence (C92) | overall productivity (O49) |
| awareness of peer output (C92) | effort of less productive workers (J29) |