The optimal assortativity of teams inside the firm

Ashwin Kambhampati and Carlos Segura‐Rodriguez
Authors registered in the RePEc Author Service: Carlos Segura-Rodríguez

RAND Journal of Economics, 2022, vol. 53, issue 3, 484-515

Abstract: How does a profit‐maximizing manager form teams and compensate workers when workers have private information about their productivity and exert hidden effort once in a team? We study a team‐production model in which positive assortative matching is both efficient and profit‐maximizing under pure adverse selection and pure moral hazard. We show that the interaction of adverse selection and moral hazard can lead to nonassortative matching if complementarities are sufficiently weak. When this is the case, the manager may prefer to delegate matching, allowing workers to sort themselves into teams.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/1756-2171.12419

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:randje:v:53:y:2022:i:3:p:484-515

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0741-6261

Access Statistics for this article

RAND Journal of Economics is currently edited by James Hosek

More articles in RAND Journal of Economics from RAND Corporation Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().