TY  - RPRT
        AU  - Afridi, Farzana
AU  - Dhillon, Amrita
AU  - Li, Sherry Xin
AU  - Sharma, Swati
        TI  - Using Social Connections and Financial Incentives to Solve Coordination Failure: A Quasi-Field Experiment in India's Manufacturing Sector
        PY  - 2018/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 11521
        UR  - https://www.iza.org/index.php/publications/dp11521
        AB  - Production processes are often organised in teams, yet there is limited evidence on whether and how social connections and financial incentives affect productivity in tasks that require coordination among workers. We simulate assembly line production in a lab-in-the-field experiment in which workers exert real effort in a minimum-effort game in teams whose members are either socially connected or unconnected and are paid according to the group output. We find that group output increases by 15% and wasted individual output is lower by 30% when workers are socially connected with their co-workers. Unlike the findings of existing research, increasing the power of group-based financial incentives does not reduce the positive effect of social connections. Our results are driven by men whose average productivity is significantly lower than that of women. These findings can be explained by pro-social behavior of workers in socially connected teams.
        KW  - minimum effort game
KW  - financial incentives
KW  - social incentives
KW  - caste-based networks
KW  - coordination
KW  - trust
        ER  -