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Partnership, reciprocity and team design

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  • De Marco, Giuseppe
  • Immordino, Giovanni

Abstract

This paper studies the effect of intention-based reciprocity preferences on the free-riding problem arising in partnerships. Our results suggest a tendency of efficient partnerships to consist of members whose sensitivity to reciprocity is – individually or jointly – sufficiently high. Sufficient conditions for the implementation of the efficient strategy profile require a reciprocity-based sharing rule so that each partner gets a fraction of the output, which is a percentage of his own sensitivity to reciprocity with respect to the overall sensitivity in the team. Finally, we introduce the concept of psychological strong Nash equilibrium and show that it allows for the unique and collusion-proof implementation of the efficient strategy profile.

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Bibliographic Info

Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 67 (2013)
Issue (Month): 1 ()
Pages: 39-58

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Handle: RePEc:eee:reecon:v:67:y:2013:i:1:p:39-58

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Web page: http://www.elsevier.com/locate/inca/622941

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Keywords: Reciprocity; Partnership; Psychological games;

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References

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  9. Georg Kirchsteiger & Ernst Fehr & Simon Gächter, 1997. "Reciprocity as a contract enforcement device: experimental evidence," ULB Institutional Repository 2013/5911, ULB -- Universite Libre de Bruxelles.
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  14. Dilip Mookherjee, 1982. "Optimal Incentive Schemes in Multiagent Situations (Now published in Review of Economic Studies, (1984).)," STICERD - Theoretical Economics Paper Series 57, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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  16. Jianpei Li, 2009. "Team production with inequity-averse agents," Portuguese Economic Journal, Springer, vol. 8(2), pages 119-136, August.
  17. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
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Cited by:
  1. Giuseppe De Marco & Giovanni Immordino, 2012. "Reciprocity in the Principal Multiple Agent Model," CSEF Working Papers 314, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  2. Matteo Bassi & Marco Pagnozzi & Salvatore Piccolo, 2013. "Optimal Contracting with Altruism and Reciprocity," CSEF Working Papers 342, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

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