Do Teams That Care About Each Other Perform Worse?

A short summary of Hattori, K. (2026) “Working Harder, Playing Safer: Mutual Concern and Risky Experimentation in Teams”.

Background

Organizations do more than place employees in teams. They invest in shared goals, cohesion, and collective incentives, all intended to make members care about one another’s outcomes. There is good reason to do so: members who care about their teammates seem likely to work hard for the team, and existing work finds that social relationships among coworkers affect workplace effort and that team incentives are more effective in more cohesive teams.

But many of the activities assigned to teams require more than diligent execution. Work is not only a matter of how much members work; it is also a matter of what they work on.

Some tasks build output steadily through familiar procedures. Others involve trying something new, with a potentially high but uncertain return.

This paper therefore asks a simple question: can the same concern for teammates that motivates people to work harder also make them less willing to experiment?

What the paper does

Consider a team of two members. Each member allocates effort between two activities.

One is a routine activity that makes a certain contribution to team output. The other is experimentation, which has a higher expected return than routine work but exposes team output to risk, and can therefore turn out badly. Trying a new method, or spending time on a new idea, are examples. Both activities draw on the same time and attention capacity, so effort devoted to one is effort unavailable to the other.

Each member values not only her own payoff but also, to some degree, the payoff of her teammate. The paper calls this degree mutual concern. It is a reduced-form measure of the weight a member places on a teammate’s outcome, and it can represent interpersonal concern, team identification, socialization, or other organizational forces that make teammates’ outcomes decision relevant.

The key point is that members are risk averse and that experimental outcomes affect common team performance. When experimentation turns out badly, the loss reaches the teammate as well. The more a member cares about that teammate, the more of that risk she effectively bears.

What it finds

First, stronger mutual concern raises total effort but reduces experimentation.

When mutual concern increases, a member internalizes more of the positive effect of her effort on her teammate. This conventional team-incentive effect raises total effort. But the same mutual concern also increases the amount of experimental risk she effectively bears: a bad experimental outcome harms not only her own payoff but also a teammate’s payoff that she cares about. The expected benefit of experimentation therefore rises with mutual concern, but the associated risk premium rises more strongly. Effort shifts from experimentation toward the safe routine activity.

Members do not become less productive because they shirk. They work harder, but redirect effort from high-return risky activity toward safe routine work.

Second, and for this reason, expected team output can fall even as total effort rises. Experimentation is the more productive activity in expected terms, so if the loss from less experimentation outweighs the gain from more routine effort, output falls even though everyone is working harder than before. Expected output can be U-shaped in the degree of mutual concern.

Nor is stronger mutual concern always better. Weak concern leaves total effort too low, while strong concern leaves experimentation too low. Evaluated by the members’ own material payoffs, the welfare-maximizing degree of mutual concern is interior: neither zero nor as large as possible.

Third, the same mechanism operates at organizational scale through team size. As a team grows, each member internalizes the payoffs of more teammates. Total effort per member rises while experimentation per member falls, so larger teams can be more diligent yet more conservative. Per-capita productivity can again be U-shaped in team size. This holds without any coordination cost, communication congestion, or increased shirking.

Fourth, the same force appears when members differ in their exposure to team performance. Members whose evaluation or career depends heavily on team output work harder but experiment less. When experimental authority must be concentrated in one member, assigning it to the less exposed member yields higher expected output.

Why it matters

The message is not that organizations should avoid cohesion or mutual concern. It is that managers should distinguish how much employees work from what they work on. A team can look highly engaged by conventional effort measures while becoming less willing to pursue high-return but uncertain initiatives. Low experimentation in a diligent team therefore need not indicate weak motivation. Members who care about their teammates internalize more of the material consequences of risky initiatives, and act accordingly. Effort composition, not only effort level, is worth monitoring.

It also follows that maximizing team orientation need not be desirable. Mutual concern is more valuable where reliable routine execution is what matters, but it can induce excessive conservatism where experimentation carries a large productivity premium.

A second implication concerns the allocation of responsibility and decision rights. Greater exposure to team performance makes a member work harder, but it also makes that member less willing to experiment. The person who should bear the greatest responsibility for team performance therefore need not be the person who should control risky initiatives. Senior members or project owners may be well positioned to sustain routine diligence, while lower-exposure members may be better positioned to explore uncertain alternatives. Accountability and experimental discretion are distinct organizational design problems.

Finally, managers need not respond to this tension by weakening team orientation. The paper also shows that assigning members to less correlated experimental directions raises their willingness to experiment and expected output: diversification has an incentive effect before it has a portfolio effect. Building a team whose members care about one another and building a team that tries new things are not mutually exclusive.

This research was supported by JSPS KAKENHI Grant Number 24K04912.