Teamwork as a Self-Disciplining Device

Matthias Fahn and Hendrik Hakenes

American Economic Journal: Microeconomics, 2019, vol. 11, issue 4, 1-32

Abstract: We show that team formation can serve as an implicit commitment device to overcome problems of self-control. If individuals have present-biased preferences, effort that is costly today but rewarded at some later point in time is too low from the perspective of an individual's long-run self. If agents interact repeatedly and can monitor each other, a relational contract involving teamwork can help to improve performance. The mutual promise to work harder is credible because the team breaks up after an agent has not kept this promise, which leads to individual underproduction in the future, reducing future utility.

JEL-codes: D11 D71 D86 M54 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/mic.20160217
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Teamwork as a Self-Disciplining Device (2017)
Working Paper: Teamwork as a Self-Disciplining Device (2017)
Working Paper: Teamwork as a Self-Disciplining Device (2014)
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