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Decision-making and implementation in teams

Author

Listed:
  • Blanes i Vidal, Jordi
  • Möller, Marc
Abstract
We use a mechanism–design approach to study a team whose members choose a joint project and exert individual efforts to execute it. Members have private information about the qualities of alternative projects. Information sharing is obstructed by a trade–off between adaptation and motivation. We determine the conditions under which first–best project and effort choices are implementable and show that these conditions can become relaxed as the team grows in size. This contrasts with the common argument (based on free–riding) that efficiency is harder to achieve in larger teams. We also characterize the second–best mechanism and find that decision–making may be biased either in favor or against the team’s initially preferred alternative.

Suggested Citation

  • Blanes i Vidal, Jordi & Möller, Marc, 2013. "Decision-making and implementation in teams," LSE Research Online Documents on Economics 51544, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:51544
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    File URL: http://eprints.lse.ac.uk/51544/
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    References listed on IDEAS

    as
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    Cited by:

    1. Spinnewijn, Johannes & Campbell, Arthur & Ederer, Florian, 2011. "Time to Decide: Information Search and Revelation in Groups," CEPR Discussion Papers 8531, C.E.P.R. Discussion Papers.
    2. Johannes Spinnewijn & Florian Ederer & Arthur Campbell, 2011. "Information Search and Revelation in Groups," 2011 Meeting Papers 997, Society for Economic Dynamics.

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    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

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