On Broadway and strip malls: how to make a winning team
AbstractA successful organization - or Broadway production - needs the right team. A potential issue is that an existing synergy between complementary agents (or assets) can reduce the marginal return of effort, creating a disincentive to invest. While agents always prefer to be in a team of complementary workers, a principal may wish to use non-complementary agents; this can occur if the loss from lower investment is sufficiently large. A principal, however, may opt for non-complementary agents when complementary workers would produce greater surplus. These insights have implications for job rotation, the centralization versus decentralization of decision making and mergers.
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Bibliographic InfoPaper provided by University of Sydney, School of Economics in its series Working Papers with number 2012-14.
Date of creation: Nov 2012
Date of revision:
mergers; assets; job rotation; task allocation; complementarity;
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