The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence Using Random Assignment to Real Social Groups

Because it is difficult to fully control behavior with incentives and contracts, the success of organizations depends on members' willingness to take unselfish, efficiency-enhancing actions, on "motivational capital" (if, for example, workers may put in extra effort even if it is not rewarded, and sanction selfish behavior by others even when it is costly to do so, this may fill the breach left by regular incentive schemes). Another important feature of organizations is that they constitute a group or social network determining with whom an individual interacts. This paper investigates whether this second aspect of organizations has an important benefit, fostering nonselfish cooperation and punishment of norm violation within the group. Although the traditional unit of analysis for studying organizations in economics has been the individual, this hypothesis is in line with an alternative view, which holds that membership in a social group transforms individuals, leading to internalized roles, norms, and values that affect behavior.