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Leadership by Confidence in Teams

Author

Listed:
  • Hajime Kobayashi

    (School of Economics, Osaka Prefecture University)

  • Hideo Suehiro

    (Graduate School of Business Administration, Kobe University)

Abstract

We study endogenous signaling by analyzing a team production problem with endogenous timing. Each agent of the team is privately endowed with some level of confidence about team productivity. Each of them must then commit a level of effort in one of two periods. At the end of each period, each agent observes his partner' s move in this period. Both agents are rewarded by a team output determined by team productivity and total invested effort. Each agent must personally incur the cost of effort that he invested. We show a set of sufficient conditions under which an agent chooses to become a leader or a follower depending on his confidence about reward from the team in a stable equilibrium. This means that a player endogenously becomes a signal sender or a signal receiver depending only on the cost-benefits from becoming a sender or a receiver.

Suggested Citation

  • Hajime Kobayashi & Hideo Suehiro, 2008. "Leadership by Confidence in Teams," Discussion Papers 2008-35, Kobe University, Graduate School of Business Administration.
  • Handle: RePEc:kbb:dpaper:2008-35
    as

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    File URL: http://www.b.kobe-u.ac.jp/paper/2008_35.pdf
    File Function: First version, 2008
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Endogenous signaling; Endogenous timing; Signaling; Value of information; Leadership; Team production;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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