Free-Riding and Performance in Collaborative and Non-Collaborative Groups

Individuals bring effort to a group to achieve a common objective. Group membership introduces a free-riding incentive, reducing effort, as well as a sense of social responsibility, increasing effort. We show experimentally that the free-riding effect is stronger. Group members significantly reduce their effort in non-collaborative groups. With collaboration, the negative effects of free-riding are not observed. Collaborating groups outperform both groups without collaboration and individuals. They do as well, statistically, as the best constituent member would have done on her own. Thus, groups aggregate existing knowledge rather than create new knowledge. JEL Classification: C92, D71, Z13 Key words: group behavior, decision making, free-riding, experiments