Reputation in Team Production
Consider team production with two people. Each person is characterized by a prior distribution that he will do Right or Wrong. After the outcome of the project is observed, these probabilities are updated. When output depends on the weakest link in production, following project failure the posterior probability that a person did Right is smaller the greater the probability that the other worder did Right. The same holds when output depends on the best shot in production and the team effort succeeded.
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