Voluntary Teaming and Effort

Discussion Papers 745

6 Regression analysis

otherwise. We also include the variable “effort of the partner” which is the effort chosen by
the partner the last time that the group was in the team remuneration mode. This variable
reflects a specific type of reciprocity, where reciprocity is defined in a strict quantitative way.
In the non-parametric analysis of our data we used a qualitative definition for reciprocity
based on the difference between the two players’ effort levels in the previous period. One
difficulty with this definition in the parametric analysis of panel data would be the inclusion
of a lagged dependent variable.

The regression results are reported in Table 3 for VOLUNTARY teaming and in Table 4 for
ENFORCED teaming. In the VOLUNTARY teaming treatments, nothing, except for the
constant term, is significant at the 1 -percent or 5-percent level. The constant represents the
participants’ effort choice in private remuneration. With 47.6 in the SYM case, 32.3 for the
low-cost players and 29.8 for the high-cost players in the ASYM case, these values are close to
the respective optimal values of 45, 35 and 28. In the team mode, by using all coefficients, we
can show that the players are closer to the Pareto optimum than their respective dominant
strategy, but the non-significant coefficients of the “team mode” and “effort of the partner”
variables make this result relatively imprecise. In the ASYM case this is particularly true for
the high-cost players.

Table 3

Choice of effort level in the VOLUNTARY SYM and ASYM treatments

(Least squares with fixed effects for individuals and periods)

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