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Anti-Sharing

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  • Kirstein, Roland
  • Cooter, Robert

Abstract

The paper proposes a mechanism that may implement first-best effort in simultaneous teams. Within the framework of this mechanism, each team members is obliged to make a fixed, non-contingent payment, and chooses his individual effort. After the output is produced, each team member receives a gross payment that equals the actual team output. We demonstrate that a Nash equilibrium exists in which each team member chooses first-best effort. We call this mechanism ?Anti-Sharing? since it solves the sharing problem that causes the inefficiency in teams. The Anti-Sharing mechanism requires one player to specialize on the role of an ?Anti-Sharer?. With an external Anti-Sharer who works on a non-profit base, the mechanism can implement first-best effort. If, however, the Anti-Sharer comes from within the team and desires a positive payoff, then the mechanism may implement not more than second-best effort. The latter version of the model could be interpreted as a new theory of firms and partnerships in the sense of the theory of Alchian and Demsetz (1972).

Suggested Citation

  • Kirstein, Roland & Cooter, Robert, 2003. "Anti-Sharing," CSLE Discussion Paper Series 2003-02, Saarland University, CSLE - Center for the Study of Law and Economics.
    • Handle: RePEc:zbw:csledp:200302
    as

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    References listed on IDEAS

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    1. Christoph Lülfesmann, 2001. "Team Production, Sequential Investments, and Stochastic Payoffs," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(3), pages 430-442, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Efficient Effort in Teams; Second-Best Solution; Partnerships;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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