Mechanism design for the increase of team performance: An economic experimentusing O-Ring and Foolproof theories

Tanita Kiatkarun Author-Email Tanitakiatkarun@gmail.com and Komsan Suriya ()
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Tanita Kiatkarun Author-Email Tanitakiatkarun@gmail.com: Chiang Mai University

The Empirical Econometrics and Quantitative Economics Letters, 2013, vol. 2, issue 2, 57 – 70

Abstract: This study constructs an economic experiment following O-ring and Foolproof theories to investigate the relationship between group formation and performance. This study will evaluate whether, or not Thais favor to work in a sequential working process (O-ring theory) or in a brainstorming process (Foolproof theory). Moreover, it will figure out the optimal combination in a group and whether a good team should contain more talented persons or just a moderate person can lead a group of weak persons. It will also compare the performance of the formation that has equally moderate persons in the same team. The results reveal that the Thais favour towards the brainstorming process rather than the sequential working process. The best formation of a team in the sequential working process is the combination of as many talented persons as possible. A group with equally moderate persons and a moderate person among weak persons show no difference of performance in this setting. For the brainstorming process the best formation goes to both a group with as many talented persons as possible, and a team with equally moderate persons. The worse formation is a team with one moderate person among weak persons. Therefore, Thais should work by brainstorming process and not let only a moderate person lead many weak persons. However, when the sequential working process is a given job, the top performance can be reached by having as many talented persons as possible in the team.

Keywords: experimental economics; O-ring theory; foolproof theory; mechanism design; group performance (search for similar items in EconPapers)
JEL-codes: O13 Q42 Q43 (search for similar items in EconPapers)
Date: 2013
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