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Teamwork as a Self-Disciplining Device

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  • Matthias Fahn
  • Hendrik Hakenes

Abstract

We show that team formation can serve as an implicit commitment device to overcome problems of self-control. If individuals have present-biased preferences, effort that is costly today but rewarded at some later point in time is too low from the perspective of an individual’s long-run self. If agents interact repeatedly and can monitor each other, a relational contract involving teamwork can help to improve performance. The mutual promise to work harder is credible because the team breaks up after an agent has not kept this promise – which leads to individual underproduction in the future and hence a reduction of future utility.

Suggested Citation

  • Matthias Fahn & Hendrik Hakenes, 2017. "Teamwork as a Self-Disciplining Device," Economics working papers 2017-13, Department of Economics, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:econwp:2017_13
    Note: English
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    Cited by:

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    3. Lang, Matthias & Schudy, Simeon, 2023. "(Dis)honesty and the value of transparency for campaign promises," European Economic Review, Elsevier, vol. 159(C).
    4. Fahn, Matthias & Seibel, Regina, 2022. "Present bias in the labor market – when it pays to be naive," Games and Economic Behavior, Elsevier, vol. 135(C), pages 144-167.
    5. Manuel A. Utset, 2023. "Time-Inconsistent Bargaining and Cross-Commitments," Games, MDPI, vol. 14(3), pages 1-21, April.
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    7. KAYABA, Yutaka & 萱場, 豊, 2016. "How do People Procrastinate to Meet a Deadline?," Discussion paper series HIAS-E-33, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    8. Yixuan Shi, 2022. "Dynamic Volunteer’s Dilemma with Procrastinators," Working Papers tax-mpg-rps-2022-17, Max Planck Institute for Tax Law and Public Finance.
    9. Enrico Miersch, 2020. "Research Evaluation of Financial Research - Evidence from a Survey," Credit and Capital Markets, Credit and Capital Markets, vol. 53(3), pages 383-419.
    10. Chen, Alice J. & Munnich, Elizabeth L. & Parente, Stephen T. & Richards, Michael R., 2023. "Provider turf wars and Medicare payment rules," Journal of Public Economics, Elsevier, vol. 218(C).
    11. Joshua S. Gans & Peter Landry, 2019. "Self-recognition in teams," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1169-1201, December.

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    More about this item

    Keywords

    Self-Control Problems; Teamwork; Relational Contracts.;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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