Voluntary Teaming and Effort



Discussion Papers 745

7 Conclusion

7 Conclusion

In our experiments, we observe many instances of team remuneration: both players chose
team remuneration in 45 percent of the periods in the symmetric specification of the game,
where the two players have the subgame perfect equilibrium strategy to choose private remu-
neration, and in 72 percent of the periods in the asymmetric specification, where the player
with the lower effort costs has the subgame-perfect equilibrium strategy to choose private
remuneration. We also observe that under team remuneration the average effort is significant-
ly higher than predicted by the subgame perfect equilibrium. Thus, participants make higher
profits in team remuneration than in private. They tend to stay with their choice of team re-
muneration but choose private remuneration as a short-run punishment for uncooperative
team effort by the other participant.

In a symmetric cost situation, we observe that voluntary teaming implies significantly higher
effort levels than enforced teaming. However, this does not come along with a significantly
higher efficiency, if we define efficiency as the realized percentage of the maximal team pro-
fit. The reason is that when teaming is voluntary participants choose effort levels above the
efficient level significantly more often than when teaming is enforced. In both the voluntary
and the enforced teaming environment, team effort is driven by a reciprocity principle: if a
player intends to change his team effort from one period to the next, he increases (decreases)
it if his own effort was lower (higher) than the other player’s effort.

In an asymmetric cost situation, we do not observe statistically significant differences in the
effort levels of the voluntary and the enforced teaming environment. We do, however, obser-
ve higher efficiency, due to larger payoffs for the high-cost players, in the voluntary teaming
environment. The reciprocity principle defined above plays a minor role (only for the low-
cost players when teaming is voluntary). It is not obvious for the two players in the asym-
metric situation where to cooperate.

We observe that in contrast to the theoretical prediction people build teams. They do better in
teams than if they make individually remunerated efforts. The degree of team cooperation,
however, depends on whether teaming is enforced or voluntary. We observe more cooperation
in voluntary teaming than in enforced teaming. This effect is most obvious in the symmetric
cost situation where it is relatively obvious to the team members, who cannot communicate
other than through their decision making, where to cooperate.

27



More intriguing information

1. The name is absent
2. The name is absent
3. The name is absent
4. The Effects of Attendance on Academic Performance: Panel Data Evidence for Introductory Microeconomics
5. Investment in Next Generation Networks and the Role of Regulation: A Real Option Approach
6. Temporary Work in Turbulent Times: The Swedish Experience
7. Reform of the EU Sugar Regime: Impacts on Sugar Production in Ireland
8. Industrial districts, innovation and I-district effect: territory or industrial specialization?
9. Markets for Influence
10. The name is absent
11. Distribution of aggregate income in Portugal from 1995 to 2000 within a SAM (Social Accounting Matrix) framework. Modeling the household sector
12. The name is absent
13. Backpropagation Artificial Neural Network To Detect Hyperthermic Seizures In Rats
14. The name is absent
15. Industrial Employment Growth in Spanish Regions - the Role Played by Size, Innovation, and Spatial Aspects
16. The name is absent
17. DEMAND FOR MEAT AND FISH PRODUCTS IN KOREA
18. Do the Largest Firms Grow the Fastest? The Case of U.S. Dairies
19. The name is absent
20. Commitment devices, opportunity windows, and institution building in Central Asia