. To evaluate whether the existence of social connections isbeneficial to the firm’s overall performance, we explore how … connectedirrespective of the worker’s ability, but when they are paid performance bonuses, they targettheir effort towards high ability … performance of connected workers,we find that favoring connected workers is detrimental for the firm’s overall performance.[...] …

%.The distribution of worker ability is such that the net effect of social incentives on the firm’saggregate performance is …

, we find that a worker’s performance improves when theaverage ability of her teammates increases. Second, we exploit the …