Do people who care about others cooperate more? Experimental evidence from relative incentive pay
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- Hernandez-Lagos, P., Minor, D. & Sisak, D. Exp Econ (2017). doi:10.1007/s10683-017-9512-9
We experimentally study ways in which social preferences affect individual and group performance under indefinitely repeated relative incentives. We also identify the mediating role that communication and leadership play in generating these effects. We find other-regarding individuals tend to depress efforts by 15% on average. However, selfish individuals are nearly three times more likely to lead players to coordinate on minimal efforts when communication is possible. Hence, the other-regarding composition of a group has complex consequences for organizational performance.