Centre for Development Economics
Department of Economics

Delhi School of Economics


Group-based incentives and individual performance: Unpacking the effort response


Anders Frederiksen
(Aarhus University)

Monday, 28 November 2022 at 4:30 PM IST
Venue: AMEX room


Group-based incentives are attractive in contexts where production is interdependent. Prior work shows such incentives increase group performance despite freeriding concerns, yet little is known about the effort response of individuals. Using individual-level data, we assess the introduction of group-based performance pay using difference-in-difference estimation. Overall, performance increased by 19 percent. Nearly all workers contributed to this effect. Further, two-thirds of this effect stems from increased efficiency (more output per unit of time) and one-third from higher attendance. Both incentive and selection effects are present. By leveraging individual-level data, we pose new questions and evidence to the group-based incentives literature.

All are cordially invited.

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