IDEAS home Printed from https://ideas.repec.org/a/tpr/jeurec/v7y2009i2-3p573-582.html
   My bibliography  Save this article

Worker Self-Selection and the Profits from Cooperation

Author

Listed:
  • Michael Kosfeld
  • Ferdinand A. von Siemens

Abstract

We investigate a competitive labor market with team production. Workers differ in their motivation to exert team effort, and types are private information. We show that there can exist a separating equilibrium in which workers self-select into different firms and firms employing cooperative workers make strictly positive profits. Profit differences across firms persist because cooperation strictly increases output and worker separation requires firms employing cooperative workers to pay out weakly lower wages. (JEL: D82, D86, M50) (c) 2009 by the European Economic Association.

Suggested Citation

  • Michael Kosfeld & Ferdinand A. von Siemens, 2009. "Worker Self-Selection and the Profits from Cooperation," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 573-582, 04-05.
    • Handle: RePEc:tpr:jeurec:v:7:y:2009:i:2-3:p:573-582
    as

    Download full text from publisher

    File URL: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jeffrey Carpenter & Erika Seki, 2011. "Do Social Preferences Increase Productivity? Field Experimental Evidence From Fishermen In Toyama Bay," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 612-630, April.
    2. Simon Gächter & Christian Thöni, 2005. "Social Learning and Voluntary Cooperation Among Like-Minded People," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 303-314, 04/05.
    3. Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
    4. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 629-649.
    5. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Kosfeld & Ferdinand A. von Siemens, 2011. "Competition, cooperation, and corporate culture," RAND Journal of Economics, RAND Corporation, vol. 42(1), pages 23-43, March.
    2. Agnieszka Tymula, 2017. "Competitive Screening of a Heterogeneous Labor Force and Corporate Teamwork Attitude," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(3), pages 523-547, September.
    3. Kamei, Kenju & Ashworth, John, 2023. "Peer learning in teams and work performance: Evidence from a randomized field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 413-432.
    4. Sabrina Teyssier, 2008. "Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts," Post-Print halshs-00303727, HAL.
    5. David J. Cooper & Krista Saral & Marie Claire Villeval, 2021. "Why Join a Team?," Management Science, INFORMS, vol. 67(11), pages 6980-6997, November.
    6. Guido Friebel & Matthias Heinz & Miriam Krueger & Nikolay Zubanov, 2017. "Team Incentives and Performance: Evidence from a Retail Chain," American Economic Review, American Economic Association, vol. 107(8), pages 2168-2203, August.
    7. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, April.
    8. Bauer, Kevin & Kosfeld, Michael & von Siemens, Ferdinand, 2021. "Incentives, Self-Selection, and Coordination of Motivated Agents for the Production of Social Goods," IZA Discussion Papers 14595, Institute of Labor Economics (IZA).
    9. Dur, Robert & Sol, Joeri, 2010. "Social interaction, co-worker altruism, and incentives," Games and Economic Behavior, Elsevier, vol. 69(2), pages 293-301, July.
    10. Derek C. Jones & Takao Kato, 2011. "The Impact of Teams on Output, Quality, and Downtime: An Empirical Analysis Using Individual Panel Data," ILR Review, Cornell University, ILR School, vol. 64(2), pages 215-240, January.
    11. Kenju Kamei & Thomas Markussen, 2023. "Free Riding and Workplace Democracy—Heterogeneous Task Preferences and Sorting," Management Science, INFORMS, vol. 69(7), pages 3884-3904, July.
    12. von Siemens, Ferdinand A. & Kosfeld, Michael, 2014. "Team production in competitive labor markets with adverse selection," European Economic Review, Elsevier, vol. 68(C), pages 181-198.
    13. Andreas Menzel, 2017. "Knowledge Exchange and Productivity Spill-overs in Bangladeshi Garment Factories," CERGE-EI Working Papers wp607, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    14. Simon Gaechter, 2006. "Conditional cooperation: Behavioral regularities from the lab and the field and their policy implications," Discussion Papers 2006-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    15. Nicolai J. Foss & Keld Laursen & Torben Pedersen, 2011. "Linking Customer Interaction and Innovation: The Mediating Role of New Organizational Practices," Organization Science, INFORMS, vol. 22(4), pages 980-999, August.
    16. Drusilla K Brown & Alan V Deardorff & Robert M Stern, 2013. "Labor Standards and Human Rights: Implications for International Trade and Investment," World Scientific Book Chapters, in: Zdenek Drabek & Petros Mavroidis (ed.), Regulation of Foreign Investment Challenges to International Harmonization, chapter 5, pages 153-195, World Scientific Publishing Co. Pte. Ltd..
    17. Safi, Shahir, 2022. "Listen before you link: Optimal monitoring rules for communication networks," Games and Economic Behavior, Elsevier, vol. 133(C), pages 230-247.
    18. Margaret A. Abernethy & Chung-Yu Hung & Laurence van Lent, 2020. "Expertise and Discretionary Bonus Decisions," Management Science, INFORMS, vol. 66(1), pages 415-432, January.
    19. Ana Catarina Pimenta & Marta Silva & Joana Cima & Miguel Portela, 2022. "Workforce skills and firm productivity," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    20. Brice Corgnet, 2018. "Rac(g)e Against the Machine? Social Incentives When Humans Meet Robots," Post-Print halshs-01984467, HAL.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:jeurec:v:7:y:2009:i:2-3:p:573-582. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.