We present results from a novel experiment on the effect of a policy designed to encourage cooperation in a prisoner's dilemma game. We find that the effect of this policy on the level of cooperation is greater when it was chosen democratically by the subjects than when it was exogenously...

Alchian and Demsetz’s (1972) influential explanation of the classical business firm argues that there is need for a concentrated residual claim in the hands of a central agent, to motivate the monitoring of workers. We model monitoring as a way to transform team production from a collective...