Reputation in Team Production

Amihai Glazer and Björn Segendorff
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Björn Segendorff: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

No 425, Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: Consider team production with two people. Each is characterized by a prior distribution that he will do Right or Wrong. After the outcome of the project is observed, these probabilities are updated. When output depends on the weakest link in production, following project failure the posterior probability that a person did Right declines with the probability that the other worker did Right. The same holds when output depends on the best shot in production and the team effort succeeded. A leader concerned about his reputation may therefore prefer to work with a person unlikely to do Right.

Keywords: Reputation; team; competence (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 J33 (search for similar items in EconPapers)
Date: 2001-01-21, Revised 2001-03-01
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Working Paper: Reputation in Team Production (2000)
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