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.
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