Tài liệu Interactions Between Workers and the Technology of Production: Evidence from Professional

IZA DP No. 3096

Interactions Between Workers and the Technology of

Production: Evidence from Professional Baseball

Eric D. Gould

Eyal Winter

DISCUSSION PAPER SERIES

Forschungsinstitut

zur Zukunft der Arbeit

Institute for the Study

of Labor

October 2007

Interactions Between Workers

and the Technology of Production:

Evidence from Professional Baseball

Eric D. Gould

Hebrew University

and IZA

Eyal Winter

Hebrew University

Discussion Paper No. 3096

October 2007

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IZA Discussion Paper No. 3096

October 2007

ABSTRACT

Interactions Between Workers and the Technology of

Production: Evidence from Professional Baseball*

This paper examines how the effort choices of workers within the same firm interact with

each other. In contrast to the existing literature, we show that workers can affect the

productivity of their co-workers based on income maximization considerations, rather than

relying on behavioral considerations such as peer pressure, social norms, and shame.

Theoretically, we show that a worker’s effort has a positive effect on the effort of co-workers if

they are complements in production, and a negative effect if they are substitutes. The theory

is tested using panel data on the performance of baseball players from 1970 to 2003. The

empirical analysis shows that a player’s batting average significantly increases with the

batting performance of his peers, but decreases with the quality of the team’s pitching.

Furthermore, a pitcher’s performance increases with the pitching quality of his teammates,

but is unaffected by the batting output of the team. These results are inconsistent with

behavioral explanations which predict that shirking by any kind of worker will increase

shirking by all fellow workers. The results are consistent with the idea that the effort choices

of workers interact in ways that are dependent on the technology of production. These

findings are robust to controlling for individual fixed-effects, and to using changes in the

composition of one’s co-workers in order to produce exogenous variation in the performance

of one’s peers.

JEL Classification: J2

Keywords: peer effects, team production, externalities

Corresponding author:

Eric D. Gould

Department of Economics

Hebrew University of Jerusalem

Mount Scopus

Jerusalem 91905

Israel

E-mail: [email protected]

*

For helpful comments and discussions, we thank Todd Kaplan, Daniele Paserman, Victor Lavy,

Daron Acemoglu, two anonymous referees, and seminar participants at Hebrew University, the

European University Institute, the Norwegian School of Economics, Tel Aviv University, and the

University of Texas.