How to share it out: the value of information in teams

Research output: Working paper

Author(s)

Department/unit(s)

Publication details

DatePublished - 9 Jul 2014
PublisherDepartment of Economics and Related Studies, University of York
Place of PublicationYork
Number of pages43
Original languageEnglish

Publication series

NameDERS Discussion Papers in Economics
PublisherDepartment of Economics and Related Studies, University of York
Volume14/08

Abstract

We study the role of information exchange, leadership and coordination in team or partnership structures. For this purpose, we view individuals jointly engaging in productive processes -- a 'team' -- as endowed with individual and privately held information on the joint production process. Once individual information is shared, team members decide individually on the effort they exert in the joint production process. This effort, however, is not contractible; only the joint output (or profit) of the team can be observed. Our central question is whether or not incentives can be provided to a team in this environment such that team members communicate their private information and exert efficient productive efforts on the basis of this communication. Our main result shows that there exists a simple ranking-based contract which implements both desiderata in a wide set of situations.

Bibliographical note

Working paper has been published in Journal of Economic Theory, no significant changes to the text. https://www.sciencedirect.com/science/article/pii/S0022053115002240

    Research areas

  • Moral hazard, Adverse selection, Leadership, Teams

Research outputs

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