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Decision-making and implementation in teams

Blanes i Vidal, Jordi and Möller, Marc (2013) Decision-making and implementation in teams. CEP Discussion Papers, CEPDP1208. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Identification Number: CEPDP1208

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.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2013 The Authors
Subjects: H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Management
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > Managerial Economics and Strategy Group
Series: Working Papers > CEP Discussion Papers
Date Deposited: 08 Aug 2013 09:30
Last Modified: 08 Aug 2013 09:30
URI: http://eprints.lse.ac.uk/id/eprint/51544

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