This paper examines how the effort choices of workers within the same firm interact with each other, and how this interaction depends on the technology of production. In contrast to the existing literature, we focus on showing how the effort choice of one worker can affect the effort choices of his co-workers based purely on income-maximizing considera- tions, rather than relying on behavioral explanations such as peer pressure, shame, etc. In addition, we break from the existing literature by showing that the effortchoiceofone worker could have a positive or negative effect on his co-workers. .
