Projects and Team Dynamics

I study a dynamic problem in which a group of agents collaborate over time to complete a project. The project progresses at a rate that depends on the agents' efforts, and it generates a pay-off upon completion. I show that agents work harder the closer the project is to completion, and members...

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Veröffentlicht in:The Review of economic studies 2015-01, Vol.82 (1 (290)), p.187-218
1. Verfasser: GEORGIADIS, GEORGE
Format: Artikel
Sprache:eng
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Zusammenfassung:I study a dynamic problem in which a group of agents collaborate over time to complete a project. The project progresses at a rate that depends on the agents' efforts, and it generates a pay-off upon completion. I show that agents work harder the closer the project is to completion, and members of a larger team work harder than members of a smaller team—both individually and on aggregate—if and only if the project is sufficiently far from completion. I apply these results to determine the optimal size of a self-organized partnership, and to study the manager's problem who recruits agents to carry out a project, and must determine the team size and its members' incentive contracts. The main results are: (i) that the optimal symmetric contract compensates the agents only upon completing the project; and (ii) the optimal team size decreases in the expected length of the project.
ISSN:0034-6527
1467-937X
DOI:10.1093/restud/rdu031