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Hierarchy and opportunism in teams

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  • van der Heijden, Eline
  • Potters, Jan
  • Sefton, Martin

Abstract

We use an experiment to compare two institutions for allocating the proceeds of team production. Under revenue-sharing, each team member receives an equal share of team output; under leader-determined shares, a team leader has the power to implement her own allocation. Both arrangements are vulnerable to opportunistic incentives: under revenue-sharing team members have an incentive to free ride, while under leader-determined shares leaders have an incentive to seize team output. We find that most leaders forego the temptation to appropriate team output and manage to curtail free riding. As a result, compared to revenue-sharing, the presence of a team leader results in a significant improvement in team performance.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 69 (2009)
Issue (Month): 1 (January)
Pages: 39-50

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Handle: RePEc:eee:jeborg:v:69:y:2009:i:1:p:39-50

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Web page: http://www.elsevier.com/locate/jebo

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Keywords: Leadership Team production Experiment;

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References

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Citations

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Cited by:
  1. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2009. "Motivating teammates: The leader's choice between positive and negative incentives," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 591-607, August.
  2. Emrah Arbak & Marie-Claire Villeval, 2013. "Voluntary leadership: motivation and influence," Social Choice and Welfare, Springer, vol. 40(3), pages 635-662, March.
  3. Daniele Nosenzo & Theo Offerman & Martin Sefton & Ailko van der Veen, 2012. "Discretionary Sanctions and Reward in the Repeated Inspection Game," Discussion Papers 2012-10, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  4. Matthew Ellman & Paul Pezanis-Christou, 2007. "Organisational structure, communication and group ethics," UFAE and IAE Working Papers 682.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  5. Daniele Nosenzo & Martin Sefton, 2012. "Promoting Cooperation: the Distribution of Reward and Punishment Power," Discussion Papers 2012-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  6. Emrah Arbak & Marie Claire Villeval, 2013. "Voluntary Leadership: Selection and Influence," Post-Print halshs-00664830, HAL.
  7. Stefan Grosse & Louis Putterman & Bettina Rockenbach, 2007. "Monitoring In Teams: A Model and Experiment on the Central Monitor Hypothesis," Working Papers 2007-4, Brown University, Department of Economics.
  8. Marcela Ibanez & Elke Schaffland, 2013. "The Effect of Outside Leaders on the Performance of the Organization: An Experiment," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 149, Courant Research Centre PEG.
  9. Daniele Nosenzo & Theo Offerman & Martin Sefton & Ailko van der Veen, 2014. "Discretionary Sanctions and Rewards in the Repeated Inspection Game," Discussion Papers 2014-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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