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On Broadway and strip malls: how to make a winning team

Author

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  • Bel, Roland
  • Smirnov, Vladimir
  • Wait, Andrew

Abstract

A successful organization - or Broadway production - needs the right team. A potential issue is that an existing synergy between complementary agents (or assets) can reduce the marginal return of effort, creating a disincentive to invest. While agents always prefer to be in a team of complementary workers, a principal may wish to use non-complementary agents; this can occur if the loss from lower investment is sufficiently large. A principal, however, may opt for non-complementary agents when complementary workers would produce greater surplus. These insights have implications for job rotation, the centralization versus decentralization of decision making and mergers.

Suggested Citation

  • Bel, Roland & Smirnov, Vladimir & Wait, Andrew, 2012. "On Broadway and strip malls: how to make a winning team," Working Papers 2012-14, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2123/8799
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    References listed on IDEAS

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    More about this item

    Keywords

    mergers; assets; job rotation; task allocation; complementarity;
    All these keywords.

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