Hierarchy and Opportunism in Teams

Eline van der Heijden (), Jan Potters and Martin Sefton

No 2006-15, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We use an experiment to compare two institutions for allocating the proceeds of team production. Under revenue-sharing, each team member receives an equal share of team output; under leader-determined shares, a team leader has the power to implement her own allocation. Both arrangements are vulnerable to opportunistic incentives: under revenue-sharing team members have an incentive to free-ride, while under leader-determined shares leaders have an incentive to seize team output. We find that most leaders forego the temptation to appropriate team output and manage to curtail free-riding. As a result, compared to revenue-sharing, the presence of a team leader results in a significant improvement in team performance.

Keywords: leadership; team production; experiment (search for similar items in EconPapers)
JEL-codes: C9 D2 L2 (search for similar items in EconPapers)
Date: 2006-09
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Hierarchy and opportunism in teams (2009)
Working Paper: Hierarchy and Opportunism in Teams (2005)
Working Paper: Hierarchy and Opportunism in Teams (2005)
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