Task
Your division consists of five or more teams. Each team of two employees is supervised by one team manager.
Team Managers and Employees will be completing the following task.
Each employee has limited resources that they are responsible for allocating each period to either their own individual project or a project being conducted jointly with the other employee on their team. Your division, and the company as a whole, are more successful when teams allocate greater resources to joint projects. As a result, you – and team managers – can achieve higher payoffs when employees allocate greater resources to joint projects.
Employees’ task each period is to decide whether to allocate a high level of resources to their team’s joint project. They will earn revenue based on their investments in the joint project.
If an employee chooses a high level of resources, they will incur a cost of 15 points. If they choose a low level of resources, they will incur no cost (0 points).
The joint project’s revenue increases with the level of resources allocated to it by each employee according to the following:
| • | If both employees choose low resources, joint project revenue = 15 points |
| • | If one employee chooses low resources and one employee chooses high resources, joint project revenue = 45 points |
| • | If both employees choose high resources, joint project revenue = 75 points |
Joint project revenue will be split equally between the two employees and the team manager, no matter what level of resources either of them allocates to the project. Thus, an employee’s payoff in points for a period will be equal to 1/3rd of the joint project’s revenue minus the cost of the resources they allocate.
Team managers’ payoffs in points for a period will be a salary of 25 points, plus 1/3rd of the joint project’s revenue.
Points will be converted to dollars at the end of the study at a rate of 100 points = $1.00.
As division director, you will receive a bonus of $5.00 if high resources are chosen in at least 25% of all employee-periods (an employee-period is the decision made by each employee – A or B – in each period). Your bonus will increase to $10.00 if high resources are chosen in at least 50% of all employee-periods, and to $15.00 if high resources are chosen in at least 75% of all employee-periods.
You have the option to include a project audit function across all teams in your division.
Specifically, you can choose to have a company auditor check project results across all teams in your division. If you choose this option, there will be an 80% likelihood that the auditor checks project results in any particular period for any particular team. Additionally, if an audit is conducted, any employee who has allocated high resources to the joint project in that period will be awarded a bonus of 15 points.
Employees on each team in your division will learn before they begin their task whether you chose to include this option for all teams in the division.
They will then complete their task for a number of periods, receiving results at the end of each period. The results of each period have no effect on subsequent periods.
{{ elif player.condition == 2 }}Each team manager has the option to include a project audit function for their team only. Specifically, each team manager can choose to have a company auditor check their team’s project results. If a team manager chooses this option, there will be an 80% likelihood that the auditor checks project results for their team in any particular period. Additionally, if an audit is conducted, any employee who has allocated high resources to the joint project in that period will be awarded a bonus of 15 points.
Employees on each team in your division will learn before they begin their task whether their team manager chose to include this option.
They will then complete their task for a number of periods, receiving results at the end of each period. The results of each period have no effect on subsequent periods.
{{ elif player.condition == 3 }}Employees have the option to include a project audit function for their team only. Specifically, they can choose to have a company auditor check project results. If they choose this option, there will be an 80% likelihood that the auditor checks project results in any particular period. Additionally, if an audit is conducted, any employee who has allocated high resources to the joint project in that period will be awarded a bonus of 15 points.
Before beginning their task, each Employee will indicate whether they wish to include the audit function. Employees will be formed into teams based on their response, and so each team will consist of two employees who both elected to include or not include the audit function. Each team will be matched with one team manager. Employees will learn whether the project audit function will be included in their task before their first work period.
They will then complete their task for a number of periods, receiving results at the end of each period. The results of each period have no effect on subsequent periods.
{{ endif }}