Horton and Zeckhauser (2016) on Peer Effects in Production

John J. Horton and Richard J. Zeckhauser, “The Causes of Peer Effects in Production: Evidence from a Series of Field Experiments.” NBER Working Paper No. 22386, July 2016 [ungated pdf version here].

• A worker’s productivity is influenced by the productivity of her co-workers. Why? 

• Do low-productivity workers fear punishment, because their slackerdom imposes more work on others, or because others simply view the provision of low effort as unfair? Do workers have a preference to not be unproductive? Does the performance of other employees signal to a worker the employer’s expectations?

• The field experiments involve hiring workers online (MTurk) to label images; the workers do not know that they are taking part in an experiment. 

• Among the findings are that peers will punish slackers even when the slackers do not impose any harm on the other workers; and, that equity concerns motivate such punishment, through a suspicion of low effort from slackers. Workers therefore want either to avoid being slackers, or, perhaps, to avoid being perceived as slackers. 

• Workers (the subjects in the experiments) label images and evaluate the labelling performance of other workers. Evaluations involve a recommendation as to whether the peer worker should be paid, and also, a suggestion of how a 9-cent bonus should be split between the evaluator and the evaluated. The recommended bonus splits are implemented. A recommendation that a worker not be paid, though not implemented, is taken to be a type of punishment of that worker.

• All of the subjects also evaluate the work of either a (specific) high effort or a low effort worker, based on work from a previous experiment. A description of the four treatments in the field experiment follows:

Baseline: Workers are shown either a very good labelling job, or a minimal effort version. They then choose to take the task (if indeed they want to), and start labelling. 

Punish: After seeing a sample of excellent work, this treatment proceeds like Baseline, except that then some good or bad work requires peer evaluation. 

Peers: After evaluation, subjects then are given a second labelling task. Will evaluating a good or a bad job (done by someone else) alter the worker’s second-round performance? 

Explicit: This is like Peers, except that workers are told to produce only two labels per image. But when they evaluate others, some of the subjects see an image with the requisite two labels, while the others see an image with 11 labels (produced by some Stakhanovite). Note that this excessive production explicitly contravenes the injunction to provide only two labels.

• And the results...

Baseline: If you are shown a high-quality sample, you are less likely to take the job, but if you take it, you increase your effort. 

Punish: Peer evaluation leads to lessened punishment for good as opposed to bad work; workers who themselves produce good work punish more. 

Peers: If you evaluate a strong worker, your subsequent work is stronger, and the effect is more pronounced if you yourself are a  high productivity worker. 

Explicit: Workers shown against-the-rules overproduction do not punish it, and many workers themselves switch to excessive output.