Sharing the Fame but Taking the Blame: When Declaring a Single Person Responsible Solves a Free Rider Problem

Xinyu Li () and Wendelin Schnedler
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Xinyu Li: PBL Netherlands Environmental Assessment Agency

No 17478, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Teams are formed because input from different people is needed. Providing incentives to team members, however, can be diffcult. According to received wisdom, declaring all members responsible fails because real responsibility for team output 'diffuses'. But why? And why and when does formally declaring one member 'responsible' mean that this member can be attributed real responsibility? We offer a model that answers these questions. We identify when jointly declaring a team responsible results in reputation free-riding. We show that declaring one person responsible can overcome this problem but only if all other team members are protected from being sanctioned.

Keywords: formal and real responsibility; collective punishment; reputation free riding (search for similar items in EconPapers)
JEL-codes: D23 D86 K12 K13 L23 M54 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2024-11
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Published - published online in: Management Science , 24 January 2025

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Working Paper: Sharing the Fame but Taking the Blame: When Declaring a Single Person Responsible Sovles a Free Rider Problem (2024)
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