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Birds of a Feather: Teams as a Screening Mechanism


  • Breton, Michèle
  • St-Amour, Pascal


  • Vencatachellum, Désiré


This paper studies the informational content of elective teams in a dynamic principal/multiple-agents framework with adverse selection. Two agents with different employment histories are paid their conditional expected marginal product. They observe their types (good or bad), and choose between working together or separately. We characterize the distributions on agents' types, nature and wages such that teams are formed exclusively by good-type agents, with and without side payments. As employment records matter when idiosyncratic contributions are difficult to isolate, a good-type agent prefers not to jeopardize his reputation by teaming up with a bad-type agent. Cet article étudie le contenu informationel des équipes facultatives, dans le cadre d'un modèle dynamique de principal-agent avec sélection adverse. Deux agents ayant des historiques d'emploi différents reçoivent leur produit marginal espéré conditionnel. Ils observent leurs types (bon ou mauvais) et doivent décider s'ils veulent travailler ensemble ou séparément. Nous caractérisons la distribution sur les types, les chocs de la nature et les salaires pour lesquelles des équipes sont formées exclusivement par deux agents de bon type, avec ou sans paiements latéraux. Parce que les dossiers d'emploi sont valorisés lorsque les contributions individuelles sont difficiles à évaluer, un agent de bon type refuse de mettre en péril sa réputation en formant une équipe avec un agent de mauvais type.

Suggested Citation

  • Breton, Michèle & St-Amour, Pascal & Vencatachellum, Désiré, 1998. "Birds of a Feather: Teams as a Screening Mechanism," Cahiers de recherche 9808, Université Laval - Département d'économique.
  • Handle: RePEc:lvl:laeccr:9808

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    References listed on IDEAS

    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-636, May.
    3. McAfee, R Preston & McMillan, John, 1991. "Optimal Contracts for Teams," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 561-577, August.
    4. Christopher Udry, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 495-526.
    5. Margaret A. Meyer, 1994. "The Dynamics of Learning with Team Production: Implications for Task Assignment," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 1157-1184.
    6. Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
    7. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
    8. Simon, Curtis J & Warner, John T, 1992. "Matchmaker, Matchmaker: The Effect of Old Boy Networks on Job Match Quality, Earnings, and Tenure," Journal of Labor Economics, University of Chicago Press, vol. 10(3), pages 306-330, July.
    9. Eric Rasmusen, 1987. "Moral Hazard in Risk-Averse Teams," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 428-435, Autumn.
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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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