Performance pay and worker cooperation: Evidence from an artefactual field experiment

Stephen V Burks, Jeffrey Carpenter, Lorenz Goette

    Research output: Contribution to journalArticlepeer-review

    39 Scopus citations

    Abstract

    We report the results of an artefactual field experiment with bicycle messengers in Switzerland and the United States. Messenger work is individualized enough that firms can choose to condition pay on it, but significant externalities in messenger behavior nonetheless give their on-the-job interactions the character of a social dilemma. Second-mover behavior in our sequential prisoner's dilemma allows us to characterize the cooperativeness of our participants. Among messengers, we find that employees at firms that pay for performance are significantly less cooperative than those at firms that pay hourly wages or who are members of cooperatives. To examine whether the difference is the result of treatment or selection we exploit the fact that firm type is location-specific in Switzerland and that entering messengers must work in performance pay firms in the U.S.

    Original languageEnglish (US)
    Pages (from-to)458-469
    Number of pages12
    JournalJournal of Economic Behavior and Organization
    Volume70
    Issue number3
    DOIs
    StatePublished - Jun 1 2009

    Keywords

    • Compensation schemes
    • Field experiment
    • Social preferences
    • Sorting

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