Middlebury

 

Presentation Title: Peer Monitoring in a Profit Sharing Workplace: An Experimental Study

Section: Poster Session Group 1 #13

Location: McCardell Bicentennial Hall, Great Hall

Date & Time: Friday, April 19, 2013 - 10:30am - 11:15am

Abstract:

Past studies in experimental economics have looked at how sharing profits with workers improves worker productivity. However, most studies have left ambiguous whether this improved productivity is due to greater incentive on any worker's end to personally work hard or due to greater incentive to monitor your peers (and punish them for slacking). This paper seeks to resolve this ambiguity in an experimental setting by exploring whether peer monitoring is a necessary condition for profit-sharing to improve worker productivity in a workplace. We ran two treatments (one with peer monitoring and one without) on small groups of "workers" and "managers" and found that, despite the presence of free-riding incentives, profit sharing schemes can effectively improve worker productivity even in the absence of peer monitoring. Rather, the presence of peer monitoring may be detrimental to effort levels if worker's feedback to the manager is not both thorough and honest.

Type of Presentation: Individual poster

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Presenter Information
Presenter(s): Akbar, Prottoy Aman
Major(s): Economics; Mathematics
Class Year(s): 2013

Sponsor(s): Carpenter, Jeffrey P.
Dept(s): Economics

Moderator: ,