Teamwork as a Self-Disciplining Device
Matthias Fahn () and
Hendrik Hakenes ()
No 2017-13, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria
We show that team formation can serve as an implicit commitment device to overcome problems of self-control. If individuals have present-biased preferences, effort that is costly today but rewarded at some later point in time is too low from the perspective of an individual’s long-run self. If agents interact repeatedly and can monitor each other, a relational contract involving teamwork can help to improve performance. The mutual promise to work harder is credible because the team breaks up after an agent has not kept this promise – which leads to individual underproduction in the future and hence a reduction of future utility.
Keywords: Self-Control Problems; Teamwork; Relational Contracts. (search for similar items in EconPapers)
JEL-codes: L22 L23 (search for similar items in EconPapers)
Pages: 51 pages
New Economics Papers: this item is included in nep-cbe and nep-hrm
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Working Paper: Teamwork as a Self-Disciplining Device (2017)
Working Paper: Teamwork as a Self-Disciplining Device (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2017_13
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