Decision-making and implementation in teams

Jordi Blanes i Vidal and Marc Möller ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We use a mechanism–design approach to study a team whose members choose a joint project and exert individual efforts to execute it. Members have private information about the qualities of alternative projects. Information sharing is obstructed by a trade–off between adaptation and motivation. We determine the conditions under which first–best project and effort choices are implementable and show that these conditions can become relaxed as the team grows in size. This contrasts with the common argument (based on free–riding) that efficiency is harder to achieve in larger teams. We also characterize the second–best mechanism and find that decision–making may be biased either in favor or against the team’s initially preferred alternative.

JEL-codes: D02 D23 L29 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2013
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http://eprints.lse.ac.uk/51544/ Open access version. (application/pdf)

Related works:
Working Paper: Decision–Making and Implementation in Teams (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:51544

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