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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 | I z A DISCUSSION PAPER SERIES IZA DP No. 3096 Interactions Between Workers and the Technology of Production Evidence from Professional Baseball Eric D. Gould Eyal Winter October 2007 Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor 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 IZA P.O. Box 7240 53072 Bonn Germany Phone 49-228-3894-0 Fax 49-228-3894-180 E-mail iza@iza.org Any opinions expressed here are those of the author s and not those of the institute. Research disseminated by IZA may include views on policy but the institute itself takes no institutional policy positions. The Institute for the Study of Labor IZA in Bonn is a local and virtual international research center and a place of communication between science politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks research support and visitors and doctoral programs. IZA engages in i original and internationally competitive research in all fields of labor economics ii development of policy concepts and iii dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. 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 .
