Delay and deadlines: freeriding and information revelation in partnerships

Campbell, Arthur, Ederer, Florian and Spinnewijn, Johannes ORCID: 0000-0002-7963-5847 (2014) Delay and deadlines: freeriding and information revelation in partnerships. American Economic Journal: Microeconomics, 6 (2). pp. 163-204. ISSN 1945-7669

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Abstract

We study two sources of delay in teams: freeriding and lack of communication. Partners contribute to the value of a common project, but have private information about the success of their own efforts. When the deadline is far away, unsuccessful partners freeride on each others' efforts. When the deadline draws close, successful partners stop revealing their success to maintain their partners' motivation. We derive comparative statics results for common team performance measures and find that the optimal deadline maximizes productive efforts while avoiding unnecessary delays. Welfare is higher when information is only privately observable rather than revealed to the partnership.

Item Type:	Article
Official URL:	http://www.aeaweb.org/aej-micro/
Additional Information:	© 2014 American Economic Association
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification:	D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M54 - Labor Management (team formation, worker empowerment, job design, tasks and authority, work arrangemetns, job satisfaction) O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General
Date Deposited:	29 May 2014 10:42
Last Modified:	12 Dec 2024 00:38
URI:	http://eprints.lse.ac.uk/id/eprint/56861

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