TY - JOUR
T1 - Hierarchy and opportunism in teams
AU - van der Heijden, E.C.M.
AU - Potters, J.J.M.
AU - Sefton, M.
N1 - Appeared earlier as CentER Dicussion paper 2005-109
PY - 2009
Y1 - 2009
N2 - 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.
AB - 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.
M3 - Article
SN - 0167-2681
VL - 69
SP - 39
EP - 50
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
IS - 1
ER -