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Reputation in Team Production

Author

Listed:
  • Glazer, Amihai

    (Department of Economics, University of California, Irvine)

  • Segendorff, Björn

    (Dept. of Economics, Stockholm School of Economics)

Abstract

Consider team production with two people. Each 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 declines with the probability that the other worker did Right. The same holds when output depends on the best shot in production and the team effort succeeded. A leader concerned about his reputation may therefore prefer to work with a person unlikely to do Right.

Suggested Citation

  • Glazer, Amihai & Segendorff, Björn, 2001. "Reputation in Team Production," SSE/EFI Working Paper Series in Economics and Finance 0425, Stockholm School of Economics, revised 01 Mar 2001.
  • Handle: RePEc:hhs:hastef:0425
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    Keywords

    Reputation; team; competence;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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