Decision–Making and Implementation in Teams

Jordi Blanes i Vidal and Marc Möller ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We use a mechanism-design approach to study a team whose members choose a joint project and exert individual efforts to execute it. Members have private information about the qualities of alternative projects. Information sharing is obstructed by a trade-off between adaptation and motivation. We determine the conditions under which first-best project and effort choices are implementable and show that these conditions can become relaxed as the team grows in size. This contrasts with the common argument (based on free-riding) that efficiency is harder to achieve in larger teams. We also characterize the second-best mechanism and find that decision-making may be biased either in favor or against the team's initially preferred alternative.

Keywords: teams; adaptation; motivation; decision–making; incentives (search for similar items in EconPapers)
JEL-codes: D02 D23 L29 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-cta, nep-hrm, nep-mic and nep-ppm
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Citations: View citations in EconPapers (2)

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Working Paper: Decision-making and implementation in teams (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1208

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