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Delay and Deadlines: Freeriding and Information Revelation in Partnerships

Listed author(s):
  • Arthur Campbell
  • Florian Ederer
  • Johannes Spinnewijn

We study two sources of delay in teams: freeriding and lack of communication. Partners contribute to the value of a common project, but have private information about the success of their own efforts. When the deadline is far away, unsuccessful partners freeride on each others' efforts. When the deadline draws close, successful partners stop revealing their success to maintain their partners' motivation. We derive comparative statics results for common team performance measures and find that the optimal deadline maximizes productive efforts while avoiding unnecessary delays. Welfare is higher when information is only privately observable rather than revealed to the partnership.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mic.6.2.163
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File URL: http://www.aeaweb.org/aej/mic/app/0602/2013-0004_app.pdf
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File URL: http://www.aeaweb.org/aej/mic/ds/0602/2013-0004_ds.zip
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Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 6 (2014)
Issue (Month): 2 (May)
Pages: 163-204

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Handle: RePEc:aea:aejmic:v:6:y:2014:i:2:p:163-204
Note: DOI: 10.1257/mic.6.2.163
Contact details of provider: Web page: https://www.aeaweb.org/aej-micro
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  1. Ufuk Akcigit & Qingmin Liu, 2011. "The Role of Information in Competitive Experimentation," PIER Working Paper Archive 11-038, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  2. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
  3. Alessandro Bonatti & Johannes Horner, 2011. "Collaborating," American Economic Review, American Economic Association, vol. 101(2), pages 632-663, April.
  4. L. J. Bourgeois, III & Kathleen M. Eisenhardt, 1988. "Strategic Decision Processes in High Velocity Environments: Four Cases in the Microcomputer Industry," Management Science, INFORMS, vol. 34(7), pages 816-835, July.
  5. Mathias Dewatripont & Isabelle Brocas & Juan Carrillo, 2004. "Commitment devices under self-control problems: an overview," ULB Institutional Repository 2013/9665, ULB -- Universite Libre de Bruxelles.
  6. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 259-276.
  7. Hongbin Cai, 2009. "Costly participation and heterogeneous preferences in informational committees," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 173-189.
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