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Decision–Making and Implementation in Teams

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  • Jordi Blanes i Vidal
  • Marc Möller

Abstract

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.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1208.

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Date of creation: May 2013
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Handle: RePEc:cep:cepdps:dp1208

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: teams; adaptation; motivation; decision–making; incentives;

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References

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  1. Ottaviani, Marco & Sorensen, Peter, 2001. "Information aggregation in debate: who should speak first?," Journal of Public Economics, Elsevier, vol. 81(3), pages 393-421, September.
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Cited by:
  1. Campbell, Arthur & Ederer, Florian & Spinnewijn, Johannes, 2011. "Time to Decide: Information Search and Revelation in Groups," CEPR Discussion Papers 8531, C.E.P.R. Discussion Papers.
  2. Johannes Spinnewijn & Florian Ederer & Arthur Campbell, 2011. "Information Search and Revelation in Groups," 2011 Meeting Papers 997, Society for Economic Dynamics.

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