Team production and gift exchange

Abstract

We study the effect of communication in a team production experimental setting where a principal decides, before contributions are made, how the team output will be allocated between himself and the team members. The allocation determines the marginal per capita rate of contributions. Without communication, we observe that high offers by the principal are followed by larger contributions by the team members (gift-exchange). With communication, only positive messages have a significant effect on the team members’ contributions: (i) positive messages increase workers’ contributions in those cases in which they receive the low offer and (ii) positive messages are accompanied of high offers to team members.