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Decision-making and implementation in teams

Blanes i Vidal, Jordi ORCID: 0009-0002-9237-2049 and Möller, Marc (2013) Decision-making and implementation in teams. CEP Discussion Papers (CEPDP1208). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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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:
Additional Information: © 2013 The Authors
Divisions: Management
Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L29 - Other
Date Deposited: 08 Aug 2013 09:30
Last Modified: 16 May 2024 11:59

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