Hierarchy and opportunism in teams

Research output: Contribution to journalArticleScientificpeer-review

24 Citations (Scopus)

Abstract

We use an experiment to compare two institutions for allocating the proceeds of team production. Under revenue-sharing, each team member receives an equal share of team output; under leader-determined shares, a team leader has the power to implement her own allocation. Both arrangements are vulnerable to opportunistic incentives: under revenue-sharing team members have an incentive to free ride, while under leader-determined shares leaders have an incentive to seize team output. We find that most leaders forego the temptation to appropriate team output and manage to curtail free riding. As a result, compared to revenue-sharing, the presence of a team leader results in a significant improvement in team performance.
Original languageEnglish
Pages (from-to)39-50
JournalJournal of Economic Behavior and Organization
Volume69
Issue number1
Publication statusPublished - 2009

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