Incentives and the structure of teams

April Franco, Matthew Mitchell and Galina Vereshchagina

Journal of Economic Theory, 2011, vol. 146, issue 6, 2307-2332

Abstract: This paper studies the relationship between moral hazard and the matching structure of teams. We show that team incentive problems may generate monotone matching predictions in the absence of complementarities in the production technology. Second, we analyze how complementarity in the underlying technology affects the matching predictions arising due to moral hazard. We find that (i) even when the production technology is strongly complementary, the incentive problem may lead to formation of negatively sorted teams; (ii) as the degree of complementarity increases, the optimal matching structure may switch from positive to negative, solely due to the need to provide incentives.

Keywords: Moral hazard; Teams; Assortative matching (search for similar items in EconPapers)
JEL-codes: D21 D82 L23 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Working Paper: Incentives and the Structure of Teams (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:146:y:2011:i:6:p:2307-2332

DOI: 10.1016/j.jet.2011.06.006

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