Effort Complementarity and Team Size, An Experimental Analysis of Moral Hazard in Teams

Francisco Costa and Joísa Dutra

Economics Bulletin, 2018, vol. 38, issue 1, 20-29

Abstract: We use laboratory experiments to analyze the effects of team size in a voluntary contribution mechanism model when contribution levels are either complementary or substitutes. A simple model shows that different team production functions provides different incentives for its members according to team size. When contributions are substitutes within teams, bigger groups increases free-riding by the decreasing marginal per capita return of effort. On the other hand, if contributions are complementary within teams, in theory, group production could increase with group size. Our results show that when efforts are substitutes the contribution level is significantly higher than when efforts are complementary and that, for both production functions, smaller groups induce higher contribution levels.

Keywords: Voluntary contribution mechanism; Coordination games; Group-incentives; Public goods. (search for similar items in EconPapers)
JEL-codes: C9 D8 (search for similar items in EconPapers)
Date: 2018-01-21
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