The Causes of Peer Effects in Production : Evidence from a Series of Field Experiments

Peer effects are a well-documented phenomenon in production settings. The economic reasons for those effects are less clear. Do workers respond to the output choices of peers because they value equity, fear punishment from equity-minded peers or because they learn from their peers what employers expect? In a series of field experiments, we test these alternative explanations. As have others, we find clear evidence of peer effects: workers exposed to high-output peers subsequently raise their own output. We also find that workers are willing to punish low-output peers, even when that low output in no way affects their own well-being. This willingness to punish on behalf of employers might arise because workers embrace the employer's expectations and punish accordingly. Consistent with this view, exposure to employer-provided work samples influences output in much the same way as does exposure to peer-provided work. However, social learning cannot be the only explanation: when we remove all uncertainty about an employer's expectations, workers still increase output beyond the employer's expectations when exposed to other workers doing the same. Overall, the evidence is strongly consistent with the notion that peer effects are mediated by workers' sense of fairness related to relative effort