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Scale economies, consistent conjectures and teams

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  • Heywood, John S.
  • McGinty, Matthew

Abstract

This paper models the behavior of team members in a consistent conjectures equilibrium. When subject to scale economies, team members produce more than Nash and when subject to scale diseconomies, they produce less than Nash. Moreover, even when effort levels of team members are perfect substitutes in production, they can be strategic complements in the face of scale economies. Finally, with sufficient scale economies, the complementarity eliminates free-riding and the team optimum is obtained.

Suggested Citation

  • Heywood, John S. & McGinty, Matthew, 2012. "Scale economies, consistent conjectures and teams," Economics Letters, Elsevier, vol. 117(3), pages 566-568.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:566-568
    DOI: 10.1016/j.econlet.2012.07.027
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    References listed on IDEAS

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    Cited by:

    1. Courey, Gabriel & Heywood, John S. & McGinty, Matthew, 2021. "Ownership shares and choosing the best leader," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 482-500.
    2. Gelves, Alejandro & McGinty, Matthew, 2016. "International environmental agreements with consistent conjectures," Journal of Environmental Economics and Management, Elsevier, vol. 78(C), pages 67-84.
    3. Matthew McGinty, 2021. "Rational conjectures and evolutionary beliefs in public goods games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(6), pages 1130-1143, December.

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    More about this item

    Keywords

    Team production; Scale economies; Consistent conjectures;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General

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