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Not just hot air: normative codes of conduct induce cooperative behavior

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Abstract

The shirking incentives arising within team production are in general counteracted by monitoring and sanctioning. However, these mechanisms are usually associated with high monitoring costs and cannot be applied to all parts of the production process. In a laboratory experiment we analyze the impact of less costly elements of organizational structure, such as normative codes of conduct and screening tests, on team production efficiency. We find that more allusions to a firm context lead to higher contributions. In particular, codes of conduct significantly increase cooperation and at the same time reduce free-riding behavior. Our study provides empirical evidence that normative codes of conduct are an effective means of increasing team production efficiency.

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Notes

  1. These terms are frequently mentioned in many job offerings in newspapers, presumably to activate cooperation. We exemplify this argument with the job offers listed on the web-sites of two large German newspapers, namely the “Frankfurter Allgemeine Zeitung” (FAZ) and “Die Welt.” We screened both databases for all job-offers that contained at least one of the following terms: team (Team), teamwork (Teamwork, Teamfähigkeit), cooperation (Zusammenarbeit) or cooperative (teamfähig, kollegial). The “Frankfurter Allgemeine Zeitung” listed 6.457 (03/13/2006) job-offers and 3.488 (54%) of them contained at least one the terms mentioned above. On the same day (03/13/2006) “Die Welt” listed 25.205 job-offers with 15.280 (61%) referring to these behavioral expectations.

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Author information

Authors and Affiliations

  1. Microeconomics, Organization Theory and Management, University of Erfurt, Erfurt, Germany

    Thomas Lauer

  2. Microeconomics, University of Erfurt, Erfurt, Germany

    Bettina Rockenbach

  3. Organization Theory and Management, University of Erfurt, Erfurt, Germany

    Peter Walgenbach

Authors
  1. Thomas Lauer
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  2. Bettina Rockenbach
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  3. Peter Walgenbach
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Corresponding author

Correspondence to Thomas Lauer.

Additional information

We recognize our strength and our competitive advantage is—and always will be—people. We will continually learn, and share ideas and knowledge. We will encourage cooperative efforts at every level and across all activities in our company. URL: http://www.boeing.com/companyoffices/aboutus/ethics/integst.htm

Appendices

Appendix 1: Experiment introduction—control treatment

1.1 General information

You are a member of a group with four members. During the whole experiment you will only interact with the members of your group.

1.2 Course

The experiment consists of 20 periods. Every group member receives an endowment of 20 tokens at the beginning of every period. You have to decide how many tokens you want to contribute to the group project. You keep the remaining tokens. At the end of every period you will receive information about the sum of all tokens contributed by the group members. You will also receive information about your individual payoff.

1.3 Payoff

Your payoff is divided into two parts:

  1. −

    The tokens you kept = Endowment − your contribution to the project

  2. −

    Your share of the project result = project-result/number of group-members

Project-result = 1.6 × sum of all tokens contributed by the group-members

Your payoff:

20 − Your contribution to the project + (1.6 × sum of all tokens contributed by the group-members)/4.

1.4 Total payoff of the experiment

Your total payoff is the sum of the payoffs of all periods. It will be paid out to you at the end of the experiment at an exchange rate of 1 € per 30 tokens.

1.5 Important notes

You are not allowed to talk to the other participants during the experiment. All decisions are anonymous. Nobody knows the identity of a participant who made a certain decision. The payoffs are also anonymous. No participant knows the payoff of the other participants.

Good luck!

Appendix 2: Experiment introduction—company treatment

2.1 General information

You are an employee of a firm with four employees. A firm is a pool of resources in which the employees contribute resources to reach the goals of the firm. During the whole experiment you will only interact with the members of your group.

2.2 Course

The experiment consists of 20 periods. Every employee receives an endowment of 20 tokens at the beginning of every period. You have to decide how many tokens you want to contribute for achieving the business objective. You keep the remaining tokens. At the end of every period you will receive information about the sum of all tokens contributed by the employees. You will also receive information about your individual payoff.

2.3 Payoff

Your payoff is divided into two parts:

  1. −

    The tokens you kept = Endowment − your contribution to the project

  2. −

    Your share of the business result = business-result/number of employees

Business-result = 1.6 × sum of all tokens contributed by the employees

Your payoff:

20 − Your contribution for achieving the business objective + (1.6 × sum of all tokens contributed by the employees)/4.

2.4 Total payoff of the experiment

Your total payoff is the sum of the payoffs of all periods. It will be paid out to you at the end of the experiment at an exchange rate of 1 € per 30 tokens.

2.5 Important notes

You are not allowed to talk to the other participants during the experiment. All decisions are anonymous. Nobody knows the identity of a participant who made a certain decision. The payoffs are also anonymous. No participant knows the payoff of the other participants.

Good luck!

Appendix 3: Experiment introduction—recruitment test treatment

3.1 General information

You are an employee of a firm with four employees. A firm is a pool of resources in which the employees contribute resources to reach the goals of the firm. During the whole experiment you will only interact with the members of your group.

3.2 Recruitment test

The employees are selected by a recruitment test which will be conducted at the beginning of the experiment. The recruitment test should assure an optimal composition of employees to reach the firm’s business objective.

3.3 Course

The experiment consists of 20 periods. Every employee receives an endowment of 20 tokens at the beginning of every period. You have to decide how many tokens you want to contribute for achieving the business objective. You keep the remaining tokens. At the end of every period you will receive information about the sum of all tokens contributed by the employees. You will also receive information about your individual payoff.

3.4 Payoff

Your payoff is divided into two parts:

  1. −

    The tokens you kept = Endowment − your contribution to the project

  2. −

    Your share of the business result = business-result/number of employees

Business-result = 1.6 × sum of all tokens contributed by the employees.

Your payoff:

20 − Your contribution for achieving the business objective + (1.6 × sum of all tokens contributed by the employees)/4.

3.5 Total payoff of the experiment

Your total payoff is the sum of the payoffs of all periods. It will be paid out to you at the end of the experiment at an exchange rate of 1 € per 30 tokens.

3.6 Important notes

You are not allowed to talk to the other participants during the experiment. All decisions are anonymous. Nobody knows the identity of a participant who made a certain decision. The payoffs are also anonymous. No participant knows the payoff of the other participants.

Good luck!

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Lauer, T., Rockenbach, B. & Walgenbach, P. Not just hot air: normative codes of conduct induce cooperative behavior. Rev Manage Sci 2, 183–197 (2008). https://doi.org/10.1007/s11846-008-0021-2

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