This paper addresses theoretically the question whether culture has an effect on economic performance in team production, and what would be an optimal team culture. The members of a team are guided both by economic incentives and by personal norms, weighed according to their prevailing level of materialism. We assume that personal norms evolve following a dynamic driven by a combination of psychological mechanisms such as consistency and conformism. The different vectors of materialism, consistency and conformism shared by the group result in a continuum of cultures characterized by different combinations of individualism and collectivism. Team culture turns out to be a fundamental determinant for long term group performance. When income distribution is not completely egalitarian or the members of the team display heterogeneous levels of skills, there is an optimal culture that maximizes steady state team production and its characteristics depend on the specific distribution of income and skills. A high average productivity or a less egalitarian dispersion of remuneration require a more collectivist culture, while a high dispersion of individual productivity requires a more individualist culture.
- Cognitive dissonance and conformity
- Culture and performance
- Economics and Econometrics
- Individualism versus collectivism
- Organizational Behavior and Human Resource Management
- Skills and remuneration distributions
- Team production