Excludability: A laboratory study on forced ranking in team production

Abstract

Exclusion has long been employed as a common disciplinary measure against defectors, both at work and in social life. In this paper, we study the effect of excludability – exclusion of the lowest contributor – on contributions in three different team production settings. We demonstrate theoretically and experimentally that excludability increases contributions. Excludability is particularly effective in production settings where the average or maximum effort determines team production. In these settings, we observe almost immediate convergence to full contribution. In settings where the minimum effort determines team production, excludability leads to a large increase in contributions only if the value of the excluded individual's contribution to the public good is redistributed among the included individuals.

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