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Project selection and execution in teams
Author(s) -
Blanes i Vidal Jordi,
Möller Marc
Publication year - 2016
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/1756-2171.12122
Subject(s) - private information retrieval , mechanism (biology) , selection (genetic algorithm) , mechanism design , computer science , project team , adaptation (eye) , process management , business , information sharing , knowledge management , microeconomics , economics , psychology , computer security , philosophy , epistemology , artificial intelligence , neuroscience , world wide web
We use a mechanism‐design approach to study a team whose members select 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. We also characterize the second‐best mechanism and find that it may include a “motivational bias,” that is, a bias in favor of the team's initially preferred project, and higher‐than‐optimal effort by uninformed team members.