Abstract
We study multilevel interactions using experimental methods. Does the efficiency of a production team suffer from the freeriding behavior of some team members at the firm level? Can we identify behavioral spillovers affecting teams? We isolate common tasks that teams must complete – coordination and cooperation – and model each of them using a simple experimental game that is designed to avoid identification problems. By observing a team's efficiency before and after the firm-level event, we identify the behavioral spillovers of freeriding to team-level cooperation and coordination. We demonstrate that team composition with respect to freeriding behavior of individual members during the firm-level conflict conditions behavioral spillovers. In particular, the efficiency of heterogeneous teams decreases after a firm-level conflict, whereas homogeneous teams can improve their performance.
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