TY  - RPRT
        AU  - Mohnen, Alwine
AU  - Pokorny, Kathrin
AU  - Sliwka, Dirk
        TI  - Transparency, Inequity Aversion, and the Dynamics of Peer Pressure in Teams: Theory and Evidence
        PY  - 2008/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3281
        UR  - https://www.iza.org/publications/dp3281
        AB  - We provide an explanation for peer pressure in teams based on inequity aversion. Analyzing a two-period model with two agents, we find that the effect of inequity aversion strongly depends on the information structure. When contributions are unobservable, agents act as if they were purely selfish. However, when contributions are made transparent at an interim stage, agents exert higher efforts in the first period and adjust their efforts according to the interim information in the second period. This form of peer pressure reduces free-riding and thus, more efficient outcomes are attained. The results are confirmed in a real effort experiment.
        KW  - real effort
KW  - team
KW  - transparency
KW  - peer pressure
KW  - free-riding
KW  - incentives
KW  - inequity aversion
KW  - experiment
        ER  -