CeDEx 2019-16: The Surprising Capacity of the Company You Keep: Revealing Group Cohesion as a Powerful Factor of Team Production

Summary

We introduce the concept of “group cohesion” to study the economic consequences of social relationships in team production. We measure group cohesion, adapting the “oneness scale” from psychology to group level. A series of experiments, including a pre-registered replication, reveals that higher cohesion groups are more likely to achieve Pareto-superior outcomes in weak-link coordination games. Judged against benchmarks, the effects of cohesion are economically large. We identify beliefs rather than social preferences as a primary mechanism explaining the effects of cohesion. Our comprehensive evidence establishes group cohesion as a powerful production factor and a useful new tool of economic research.

This paper has been superceded by 2022-12 "Measuring "group cohesion" to reveal the power of social relationships in team production".

Download a PDF of 2022-12 here.

Authors

Simon Gaechter, Chris Starmer and Fabio Tufano

 

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