Abstract
In this paper, I conduct the first experiment exploring the interaction between identity and incentives. I construct workgroups which are either homogeneous or heterogeneous in members' identities and examine their productivity at a real-effort task under tournament pay and team pay. I find that in homogeneous workgroups, productivity is higher under team pay; in heterogeneous workgroups, productivity is however similar under both incentive schemes. Team pay induces greater helping of peers, especially in homogeneous workgroups. Tournament pay induces higher personal effort, especially in heterogeneous workgroups. I also find that incentives influence workers' identities and that females underperform under tournament pay.
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