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Career Concerns in Teams

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  • Emmanuelle Auriol

    (Atelier de Recherche Quantitative Appliquee au Developpement Economique and Institut d'Economie Industrielle, Toulouse)

  • Guido Friebel

    (Stockholm Institute for Transition Economics and Institut d'Economie Industrielle, Toulouse, Centre for Economic Policy Research)

  • Lambros Pechlivanos

    (Foundation for Economic and Industrial Research, Athens)

Abstract

We investigate how changes in the commitment power of a principal affect cooperation among agents who work in a team. When the principal and her agents are symmetrically uncertain about the agents' innate abilities, workers have career concerns. Then, unless the principal can commit herself to long-term wage contracts, an implicit sabotage incentive emerges. Agents become reluctant to help their teammates. Anticipating this risk, and in order to induce the desired level of cooperation, the principal offers more collectively oriented incentive schemes. Temporary workers, though, are not affected by the sabotage effect, and their incentives are more individually oriented.

Suggested Citation

  • Emmanuelle Auriol & Guido Friebel & Lambros Pechlivanos, 2002. "Career Concerns in Teams," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 289-307, Part.
  • Handle: RePEc:ucp:jlabec:v:20:y:2002:i:2:p:289-307
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    File URL: http://dx.doi.org/10.1086/338240
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    References listed on IDEAS

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    1. Meyer, Margaret A. & Olsen, Trond E. & Torsvik, Gaute, 1996. "Limited intertemporal commitment and job design," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 401-417, December.
    2. Jaime Ortega, 2003. "Power in the Firm and Managerial Career Concerns," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 1-29, March.
    3. Auriol, Emmanuelle & Friebel, Guido & Pechlivanos, Lambros, 1999. "Teamwork Management in an Era of Diminishing Commitment," CEPR Discussion Papers 2281, C.E.P.R. Discussion Papers.
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