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Teamwork as a Self-Disciplining Device

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  • Matthias Fahn
  • Hendrik Hakenes

Abstract

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, reducing future utility.

Suggested Citation

  • Matthias Fahn & Hendrik Hakenes, 2019. "Teamwork as a Self-Disciplining Device," American Economic Journal: Microeconomics, American Economic Association, vol. 11(4), pages 1-32, November.
    • Handle: RePEc:aea:aejmic:v:11:y:2019:i:4:p:1-32
    Note: DOI: 10.1257/mic.20160217
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    3. Lang, Matthias & Schudy, Simeon, 2023. "(Dis)honesty and the value of transparency for campaign promises," European Economic Review, Elsevier, vol. 159(C).
    4. Joshua S. Gans & Peter Landry, 2019. "Self-recognition in teams," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1169-1201, December.
    5. Matthias Fahn, 2019. "Reciprocity in dynamic employment relationships," CESifo Working Paper Series 7634, CESifo.
    6. KAYABA, Yutaka & 萱場, 豊, 2016. "How do People Procrastinate to Meet a Deadline?," Discussion paper series HIAS-E-33, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    7. Enrico Miersch, 2020. "Research Evaluation of Financial Research - Evidence from a Survey," Credit and Capital Markets, Credit and Capital Markets, vol. 53(3), pages 383-419.
    8. Yixuan Shi, 2022. "Dynamic Volunteer’s Dilemma with Procrastinators," Working Papers tax-mpg-rps-2022-17, Max Planck Institute for Tax Law and Public Finance.
    9. Manuel A. Utset, 2023. "Time-Inconsistent Bargaining and Cross-Commitments," Games, MDPI, vol. 14(3), pages 1-21, April.
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    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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