How to Share it out: The Value of Information in Teams

Alex Gershkov, Jianpei Li and Paul Schweinzer

No 4906, CESifo Working Paper Series from CESifo

Abstract: We study the role of information exchange, leadership and coordination in team or partnership structures. For this purpose, we view individuals jointly engaging in productive processes—a ‘team’—as endowed with individual and privately held information on the joint production process. Once individual information is shared, team members decide individually on the effort they exert in the joint production process. This effort, however, is not contractible; only the joint output (or profit) of the team can be observed. Our central question is whether or not incentives can be provided to a team in this environment such that team members communicate their private information and exert efficient productive efforts on the basis of this communication. Our main result shows that there exists a simple ranking-based contract which implements both desiderata in a wide set of situations.

Keywords: moral hazard; adverse selection; leadership; teams (search for similar items in EconPapers)
JEL-codes: C70 D70 D80 L20 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: How to share it out: The value of information in teams (2016)
Working Paper: How to share it out: The value of information in teams (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4906

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