Implicit Incentives and Delegation in Teams

Harvey Upton ()
Additional contact information
Harvey Upton: School of Business and Economics, Humboldt-Universität zu Berlin, 10178 Berlin, Germany

Management Science, 2024, vol. 70, issue 7, 4722-4741

Abstract: We study an infinitely repeated game of team production, where agents must supply costly effort under moral hazard. The principal also has the option to delegate an additional production-relevant decision to a team member. We provide conditions under which delegation changes the scope of peer sanction and thus influences the implicit incentives generated by the agents’ repeated interaction. Delegation can then become strictly optimal, despite misaligned preferences and symmetric information regarding the efficient decision. We show that implicit incentives under delegation are strongest in diverse teams and use our results to discuss various aspects of organizational design, including self-organized teamwork.

Keywords: economics: microeconomic behavior; economics: game theory and bargaining theory; organizational studies: personnel; organizational studies: design; teams (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2022.02212 (application/pdf)

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:inm:ormnsc:v:70:y:2024:i:7:p:4722-4741

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().