Profit sharing and group incentives

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Profit sharing and group incentives?
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The growth of teams Percent of citations to
papers with more than one author
S. Wuchty et al., Science 316, 1036 -1039
(2007)
Published by AAAS
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Profit sharing and group incentives?

• Did any companies experience free riding?

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Evidence of free riding
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Individual incentives vs group incentives
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Correlation between group options and total scores
Implication Free riding doomed the company
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What should happen to incentives to provide
company output as the semester progresses?
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What should happen to incentives to provide
company output as the semester progresses?

• Companies close to the lead?
• Companies far away from the lead?

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(No Transcript)
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Dependent variable Fraction of possible points
earned by the company during the week Independent
Variables Position Ratio of company points to
the top team at the start of the week Learn_Team
Whether the company is made up of a learning
team Ability Average performance of the company
on the first midterm exam