Social Value Orientation and Unequal Productivity: Optimizing Collaboration in the Workplace

Understanding the drivers of prosocial behavior in collaborative work settings, particularly under conditions of unequal productivity, is essential for effective team management. This paper explores how collaborative behavior is influenced by two factors: workers’ social value orientation and the origins of productivity differences – whether they are exogenous or arise from endogenous effort-based factors that may trigger an entitlement effect. I develop a theoretical model that accurately measures efficient coworker matching considering their altruism and inequality aversion levels required for optimal work collaboration in the presence of a productivity gap. Their salaries are tied to their productivity level, and equilibria are unaffected by belief variations. The role of social preferences and the entitlement effect are tested through an online experiment. Results indicate that both factors significantly increase collaboration among higher-productivity workers, while workers with lower productivity due to exerting less effort and those with higher degrees of altruism reduce their collaboration choices when there is a large payoff gap. Additionally, I demonstrate that the entitlement effect can create preference inconsistencies between lower-productivity individuals’ revealed preferences and their actual behavior. These findings highlight the importance of considering the origins of productivity inequalities to design collaborative environments that enhance team performance. By understanding the nuances of social values and work context, managers can better predict collaboration tendencies and encourage effective teamwork.