Sources

• Orr, S. (2001). The economics of shame in work groups: How mutual monitoring can decrease cooperation in teams. Kyklos, 54, 49-50-66.​
• Petersen, T. (1992). Individual, collective, and systems rationality in work groups: Dilemmas and non-market solutions.  Rationality and society. 4: 332-355.​
• Cule, M. (2011). Environmental economics: Reducing degradation through incentives [Online image]. Retrieved April 12, 2012 from http://www2.uregina.ca/
  yourblog/?p=2123​
• Pietrelli, L. (2012). Green economy: Opportunity of fashion? [Online image]. Retrieved April 12, 2012 from http://www.sarconiweb.it/gazzettavaldagri/2012/12/19/green-economy-occasione-o-moda/

Articles

• "The economics of shame in work groups"  by Shepley Orr
• "Individual, collective and systems rationality in work groups" by Trond Peterson​
   
  Subject Matter
• These articles discuss information on how to improve group dynamics and overcome issues that are often associated with groups of people working together, such as free-rider problems and improper monitoring of each group member’s burden of costs.
  ​
  Issues at Hand​
• ​In a group dynamic, members “pay” with effort and are rewarded with the benefits. A common issue in group work is that some members “pay” less than their fair share of the costs and free-ride off of the effort of other members. The likelihood of this issue occurring increases exponentially if there is a communication barrier and improper monitoring of costs.​

 Findings 

 

• Orr’s studies suggests that improved group dynamics raise overall productivity by bringing together a larger aggregation of groups and presenting the freedom to choose with whom members work with and the focuses of their projects. ​
• Trond Petersen offers a solution to the principal-agent problem that commonly surfaces. Petersen suggests tying in incentive-based rewards (of any kind, from grades to funding, if applicable). Members of the group now rely on each other for compensation and the burden of monitoring falls on each agent, instead of the principle who may not be present for monitoring. This shift in burden creates a normative (moral) motivation and a fear of disapproval from direct peers, which leads to a much higher rate of cooperation within a group.

Economics