Feedback in Voluntary Contribution Mechanisms: An Experiment in Team Production

Alchian and Demsetz's (1972) classic paper models team production as a public good. They claim detection of individual effort levels, rather than aggregate effort levels, reduces shirking (free riding). This paper experimentally tests this claim. Participants are informed either about the individual contributions of others on their team or only about their team's total contribution. Average contributions in the two treatments are the same. However, contributions under individual feedback have a significantly higher variance than those under total feedback. Implications of these results for team production are discussed.