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PEER EVALUATIONS AND TEAM PERFORMANCE: WHEN FRIENDS DO WORSE THAN STRANGERS

Authors

  • BRICE CORGNET

    1. Corgnet: Assistant Professor, Business Department, Universidad de Nevarra, Spain; and LESSAC, ESC Dijon, France. E-mail bcorgnet@unav.es
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    • The author acknowledges financial support from Grant ECO2008-00977/ECON from the Spanish Ministry of Education and from Piuna project of the University of Nevarra.


Abstract

We use peer assessments as a tool to allocate joint profits in a real-effort team experiment. We find that using this incentive mechanism reduces team performance. More specifically, we show that teams composed of acquaintances rather than strangers actually underperform in a context of peer evaluations. We conjecture that peer evaluations undermine the inherently high level of intrinsic motivation that characterizes teams composed of friends and possibly exacerbate negative reciprocity among partners. Finally, we analyze the determinants of peer assessments and stress the crucial importance of equality concerns. (JEL C92, M12, M54)

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