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Sharing the Fame but Taking the Blame: When Declaring a Single Person Responsible Sovles a Free Rider Problem

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  • Li, Xinyu
  • Schnedler, Wendelin

Abstract

Teams are formed because input from different people is needed. Providing incentives to team members, however, can be difficult. According to received wisdom, declaring all members responsible fails because real responsibility for team output "diffuses." But why? And why and when does formally declaring one member "responsible" mean that this member can be attributed "real" responsibility? We offer a model that answers these questions. We identify when jointly declaring a team responsible results in reputation free-riding. We show that declaring one person responsible can overcome this problem but only if all other team members are protected from being sanctioned.

Suggested Citation

  • Li, Xinyu & Schnedler, Wendelin, 2024. "Sharing the Fame but Taking the Blame: When Declaring a Single Person Responsible Sovles a Free Rider Problem," EconStor Preprints 306485, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:306485
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    Keywords

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    JEL classification:

    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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