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Investment in Human Capital in Team Members Who Are Involved in Collective Decision Making
Author(s) -
BenYashar Ruth,
Paroush Jacob
Publication year - 2003
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/1467-9779.t01-1-00146
Subject(s) - human capital , investment (military) , economics , function (biology) , microeconomics , capital (architecture) , investment decisions , capital investment , finance , market economy , law , political science , behavioral economics , history , archaeology , evolutionary biology , politics , biology
This paper studies an investment policy which improves the ability of team members to decide correctly. We specify sufficient conditions on the learning function such that the best policy of investment in human capital is to invest first in the least competent person. Despite the fact that team members who are endowed with more human capital contribute more to the probability that the whole team would decide correctly, the liberal policy is still optimal under these conditions. Moreover, within the dichotomous model of collective decision‐making, we show that these conditions are not so stringent.