Free Riding and Unequal Pay in Symmetric Teams

  • Abstract
  • References
  • Similar Papers
Abstract
Translate article icon Translate Article Star icon
Take notes icon Take Notes

This paper studies dynamic incentive pay in teams where agents' efforts are perfect substitutes. It shows that the principal may unequally reward identical agents to mitigate dynamic free riding in the form of procrastination. Unequal pay effectively creates a “team leader” who overworks and symmetric “followers” who underwork. Such leader-follower teams emerge if (i) agents are relatively patient or few, or (ii) the principal sufficiently cares about or is not patient for project success. These findings contrast with the recent literature (e.g., Winter 2004), pinpointing effort complementarity as the source of unequal pay in symmetric teams. (JEL D82, J22, J31, M52)

ReferencesShowing 10 of 27 papers
  • Open Access Icon
  • Cite Count Icon 35
  • 10.1016/j.jet.2011.06.006
Incentives and the structure of teams
  • Feb 28, 2009
  • Journal of Economic Theory
  • April Mitchell Franco + 2 more

  • Cite Count Icon 101
  • 10.1257/aer.97.3.944
Leadership and Information
  • May 1, 2007
  • American Economic Review
  • Mana Komai + 2 more

  • Cite Count Icon 39
  • 10.1257/aer.20140316
The Politics of Compromise
  • Jun 2, 2014
  • American Economic Review
  • Alessandro Bonatti + 1 more

  • 10.2139/ssrn.3724923
Efficiency in Repeated Partnerships
  • Oct 1, 2020
  • SSRN Electronic Journal
  • Doruk Cetemen

  • 10.2139/ssrn.4648556
Monitoring Team Members: Information Waste and the Transparency Trap
  • Jan 1, 2023
  • SSRN Electronic Journal
  • Matteo Camboni + 1 more

  • Cite Count Icon 193
  • 10.1016/0014-2921(91)90004-3
Dynamic voluntary provision of public goods
  • Jul 1, 1991
  • European Economic Review
  • Chaim Fershtman + 1 more

  • Cite Count Icon 142
  • 10.1016/s0022-0531(03)00114-5
Coordination and discrimination in contracting with externalities: divide and conquer?
  • Jun 11, 2003
  • Journal of Economic Theory
  • Ilya Segal

  • Open Access Icon
  • Cite Count Icon 198
  • 10.1257/aer.101.2.632
Collaborating
  • Apr 1, 2011
  • American Economic Review
  • Alessandro Bonatti + 1 more

  • Cite Count Icon 43
  • 10.1257/aer.20200555
Rank Uncertainty in Organizations
  • Mar 1, 2021
  • American Economic Review
  • Marina Halac + 2 more

  • Cite Count Icon 292
  • 10.2307/2297967
Joint Projects without Commitment
  • Apr 1, 1991
  • The Review of Economic Studies
  • Anat R Admati + 1 more

Similar Papers
  • Research Article
  • Cite Count Icon 46
  • 10.1016/j.jom.2015.05.001
Team leader experience in improvement teams: A social networks perspective
  • May 11, 2015
  • Journal of Operations Management
  • George S Easton + 1 more

Team leader experience in improvement teams: A social networks perspective

  • Research Article
  • 10.2139/ssrn.2436972
Types of Team Leader Experience: Disentangling the Effects on Six Sigma Project Success
  • May 14, 2014
  • SSRN Electronic Journal
  • George S Easton + 1 more

Recent research highlights team leader experience as an important factor associated with quality improvement project success. In this paper, we disentangle team leader experience into two distinct facets—team leader “connectedness” and project type experience—and examine their relationship to project success. We apply social network analysis techniques to develop a novel measure for team leader connectedness, which captures the extent to which a leader has connections to a variety of people from working together on prior improvement projects. Rather than only counting these connections, this measure weights each connection by how well-connected, in turn, those individuals are. Based on analysis of archival data of six sigma projects spanning six years from a Fortune 500 consumer products manufacturer, we find that team leader connectedness and experience leading projects of the same type both increase the likelihood of project success. We also show that organizational experience moderates the relationship between team leader same-type project experience and project success. However, this is not the case for the relationship between team leader connectedness and project success. These results provide insights regarding how dimensions of team leader experience and organizational experience collectively impact the operational performance of improvement teams.

  • Research Article
  • Cite Count Icon 65
  • 10.1016/j.jebo.2008.09.007
Hierarchy and opportunism in teams
  • Oct 14, 2008
  • Journal of Economic Behavior & Organization
  • Eline Van Der Heijden + 2 more

Hierarchy and opportunism in teams

  • Research Article
  • Cite Count Icon 1424
  • 10.1287/orsc.12.4.435.10635
Teamwork Quality and the Success of Innovative Projects: A Theoretical Concept and Empirical Evidence
  • Aug 1, 2001
  • Organization Science
  • Martin Hoegl + 1 more

An extensive body of literature indicates the importance of teamwork to the success of innovative projects. This growing awareness, that “good teamwork” increases the success of innovative projects, raises new questions: What is teamwork, and how can it be measured? Why and how is teamwork related to the success of innovative projects? How strong is the relationship between teamwork and various measures of project success such as performance or team member satisfaction? This article develops a comprehensive concept of the collaboration in teams, called Teamwork Quality (TWQ). The six facets of the TWQ construct, i.e., communication, coordination, balance of member contributions, mutual support, effort, and cohesion, are specified. Hypotheses regarding the relationship between TWQ and project success are tested using data from 575 team members, team leaders, and managers of 145 German software teams. The results of the structural equation models estimated show that TWQ (as rated by team members) is significantly associated with team performance as rated by team members, team leaders, and team-external managers. However, the magnitude of the relationship between TWQ and team performance varies by the perspective of the performance rater, i.e., manager vs. team leader vs. team members. Furthermore, TWQ shows a strong association with team members' personal success (i.e., work satisfaction and learning).

  • Research Article
  • Cite Count Icon 9
  • 10.1049/ir:20010505
Making the team [project team building and leadership
  • Sep 1, 2001
  • IEE Review
  • G Smith

The author outlines the role of team building and team leadership in successful project management. Different teams work in radically dissimilar environments, although it can be argued that it is the project team environment that is the most complex to analyse, as each project is unique and the conditions for team selection and motivation are often less than ideal. All this implies an overwhelming case for giving more attention to the art and science of project team building. A variety of factors are invoked in building high-performing teams, including the contributions made by individual members, leadership, communications and internal power relationships. Each of these will have an effect on whether or not your team performs successfully. The characteristics of individual team members can be categorised by a combination of nine distinct roles. These comprise: plant, resource investigator, co-ordinator, shaper, monitor evaluator, team-worker, implementer, completer/finisher and specialist. Their contributions and weaknesses are outlined. Three styles of leadership are also briefly discussed: laissez-faire, transactional and transformational.

  • Research Article
  • Cite Count Icon 49
  • 10.1007/s10799-010-0072-3
IT infrastructure capabilities and IT project success: a development team perspective
  • Aug 31, 2010
  • Information Technology and Management
  • Xiaobo Xu + 2 more

In this research we investigate how IT infrastructure capabilities are related to IT project success from a development team perspective. We first conduct an extensive literature review and summarize the insights to suggest an IT infrastructure base model. Drawing upon several other bodies of literature, particularly the psychology literature, we then build upon the base model to propose an integrative research model for IT project success that considers both actual and perceived effects of IT infrastructure capabilities. This research model argues that (1) teamwork quality mediates the effect of technical and human IT infrastructure capabilities on IT project success, and (2) team perceptions of both IT infrastructure and team capabilities shape team perceived likelihood of project success, which subsequently affects team commitment that is crucial to IT project success. We also propose a direct-effect model that directly links all constructs to IT project success so that we can test the efficacy of our proposed research model by comparing all three models. We then collect empirical data (n = 91) through an online survey of CIO/CTOs and team leaders. All three models are evaluated and compared using the partial least squares method. The results show strong support for the proposed research model except for two IT infrastructure components. We discuss the practical and theoretical implications of the findings, and suggest several ways this research can be extended.

  • Research Article
  • Cite Count Icon 11
  • 10.19026/rjaset.7.911
Effectiveness of Project Teams and their Impact on the Performance of Saudi Construction Projects
  • Jun 25, 2014
  • Research Journal of Applied Sciences, Engineering and Technology
  • Sadi Assaf + 2 more

The objective of this study is to determine the nature and strength of relationship between the different elements of teamwork effectiveness and overall project success. Literature has been reviewed on constituents of effective teamwork and indicators for project success to determine the relationship. Two questionnaires were used to determine the nature and strength of the relationship between components of effective teamwork and overall project success. Data on the questionnaires were gathered from 13 different project teams of large commercial buildings in Saudi Arabia. The research showed a positive and high correlation between team effectiveness and project success. Analysis of the obtained data indicated that three factors of teamwork are strongly associated with project success. These factors are team roles and responsibilities, team goals and objectives and team leadership. The research conducted is most beneficial for project managers and team leaders in construction organizations to adjust their focus on key components of effective teamwork that lead to augment the possibilities of project success.

  • Research Article
  • Cite Count Icon 1
  • 10.52015/nijbm.v16i2.74
Do Employee Trust and Job Satisfaction Mediate the Relationship of Leadership Styles and Emotional Intelligence with Project Success?
  • Mar 8, 2022
  • NUML International Journal of Business & Management
  • Adina Khan, Jamil Anwar, Said Shah

The current study investigates the impact of Leadership Styles (LS) and Emotional Intelligence (EI) on Project Success (PS) through underlying mediating mechanism of Job Satisfaction (JS) and trust. Total 160 responses were received from the team leaders (project managers, project leaders, project coordinators) of the NGOs sector of Pakistan. The findings of the research show that the relationship of LS and EI have significantly positive impact on the PS. Further, JS and Trust is positively and significantly influencing the PS and mediate the relationship of both LS and EI with PS. Within leadership styles, transactional leadership and Laissez Faire leadership styles have positive relationship with PS. However, the negative relationship of transformational leadership with PS is somewhat surprising as this relationship was expected to be positive. The findings suggest that project managers in NGOs must be aware of the impact of certain leadership behaviors and level of emotional intelligence for completing the projects successfully.

  • Research Article
  • Cite Count Icon 12
  • 10.1080/00036846.2014.948678
The effects of optimism bias in teams
  • Aug 14, 2014
  • Applied Economics
  • Jian Wang + 3 more

This article imports a behavioural perspective into a team context to study the effort-coordination problem among agents. Specifically, we investigate how the presence of optimism bias impacts the severity of the free-rider problem, the organizational structure of the team and the compensation contracts offered to agents in equilibrium. The results indicate that all agents become more reluctant to exert effort and the team welfare decreases when some of its agents are optimistic, suggesting that optimism aggravates the free-rider problem in teams. Appointing a team leader makes all agents work harder, and the team benefits more by having the optimistic agent as its leader. These findings are in sharp contrast to the effects of overconfidence as identified in the literature. It is advisable to pay the optimistic agents less than the rational agents. Encouragingly, optimistic agents can learn about their own bias in the long run, leaving their team without too much detriment of optimism.

  • Research Article
  • Cite Count Icon 10
  • 10.2139/ssrn.843508
The Effects of Biased Self-Perception in Teams
  • Nov 13, 2005
  • SSRN Electronic Journal
  • Simon Gervais + 1 more

Several finance and economics problems involve a team of agents in which the marginal productivity of any one agent increases with the effort of others on the team. Because the effort of each agent is not observable to any other agents, the performance of the team is negatively affected by a free-rider problem and by a lack of effort coordination across agents. In this context, we show that an agent who mistakenly overestimates her own marginal productivity works harder, thereby increasing the marginal productivity of her teammates who then work harder as well. This not only enhances team performance but may also create a Pareto improvement at the individual level. Indeed, although the biased agent overworks, she benefits from the positive externality that other agents working harder generates. The presence of a team leader improves coordination and team value, but self-perception biases can never be Pareto-improving when they affect the leader. Because self-perception biases naturally make agents work harder, monitoring, even when it is costless, may hurt the team by causing an overinvestment in effort. Interestingly, the benefits of self-perception biases may be long-lived even if agents learn from team performance, as the biased agent attributes the team's success to her own ability, and not to the better coordination of the team.

  • PDF Download Icon
  • Research Article
  • Cite Count Icon 8
  • 10.1186/s13012-014-0091-2
Quality improvement collaboratives and the wisdom of crowds: spread explained by perceived success at group level
  • Jul 22, 2014
  • Implementation Science : IS
  • Michel L A Dückers + 2 more

BackgroundMany studies have been conducted to evaluate the impact of quality improvement collaboratives (QICs) on the quality of healthcare. This article addresses an underexplored topic, namely the use of QICs as ‘intentional spread strategy.’ Its objective is to predict the dissemination of projects within hospitals participating in a change programme based on several QICs. We tested whether the average project success at QIC level (based on opinions of individual project team leaders) explains the dissemination of projects one year later.FindingsAfter one year, 148 project team leaders of 16 hospitals participating in the two-year programme were asked to rate the success of their improvement project on a scale from 1 to 10. At the end of the second year, the programme coordinator of each hospital provided information on the second-year dissemination. Average success scores and dissemination statistics were calculated for each QIC (N = 12). The non-parametric correlation between team leader judgment and dissemination rate at QIC level is 0.73 (P < 0.01).ConclusionsPrevious work, focusing on the team and hospital level, showed which factors contributed to local success stories. It also illustrated how successes play a role in dissemination processes within programme hospitals. The current study suggests that we cannot ignore the extent to which the dissemination potential of individual projects is defined by their QIC. Aggregated team leader judgments at the QIC level might predict the future dissemination in participating organizations. The findings, however, need to be replicated in larger, independent samples.Electronic supplementary materialThe online version of this article (doi:10.1186/s13012-014-0091-2) contains supplementary material, which is available to authorized users.

  • Research Article
  • Cite Count Icon 38
  • 10.1097/00001888-199911000-00018
Leadership behaviors for successful university--community collaborations to change curricula.
  • Nov 1, 1999
  • Academic Medicine
  • C J Bland + 5 more

What constitutes effective leadership in a collaborative effort to achieve enduring curricular and student career changes? This question was investigated as part of a larger evaluation of the W. K. Kellogg Foundation's Community Partnership Health Professions Education, a five-year initiative involving projects at seven sites. The goal was to produce more primary care health providers by making enduring curricular change. Data were collected from participants with respect to predictors of project success and leaders' use of 16 behaviors via telephone interviews, mailed surveys, and focus groups. Focus groups also gathered project leaders' views of skills and knowledge necessary for effective leadership. Leadership strategies associated with positive outcomes were: consistent leader; use of multiple cognitive frames, especially a human resource frame; use of a broad range of leadership behaviors, particularly participative governance and cultural influence; and a majority of community representatives on the partnership board. The primary leader, compared with a leadership team, is most influential in achieving positive outcomes. Effective leaders use a broad array of behaviors, but particularly emphasize the use of participative governance and culture/value-influencing behaviors. In addition, the more frequent use of these behaviors compared with the use of organizational power behaviors is important. It is helpful to perceive the project from a human-relations frame and at least one other frame. Using a leadership team can be helpful, especially in building coalitions, but the importance of the primary leader's behaviors to project outcomes is striking.

  • Research Article
  • Cite Count Icon 45
  • 10.1016/j.ijproman.2021.10.007
Exploring the critical nexus between authoritarian leadership, project team member's silence and multi-dimensional success in a state-owned mega construction project
  • Nov 1, 2021
  • International Journal of Project Management
  • Umer Zaman + 4 more

Exploring the critical nexus between authoritarian leadership, project team member's silence and multi-dimensional success in a state-owned mega construction project

  • Research Article
  • Cite Count Icon 109
  • 10.1016/j.jom.2012.08.002
The role of experience in six sigma project success: An empirical analysis of improvement projects
  • Aug 20, 2012
  • Journal of Operations Management
  • George S Easton + 1 more

The role of experience in six sigma project success: An empirical analysis of improvement projects

  • Conference Article
  • 10.1063/5.0110631
A pragmatic study on IT project success factors
  • Jan 1, 2023
  • Shrutika Kulkarni + 1 more

Project management, as per PMI, is characterized as the application of expertise, skills, tools, and activities to fulfill the requirements of the project. Project management is divided into five groups: initiating, preparing, carrying out, tracking, and closing. These are the recurring elements. Project management, in a wider sense, uses factors, criteria that correlate with projects. The factors explain the importance of the project's objectives and the expectations from it. Although many studies give an idea of project management in the IT sector, this paper signifies the universality of IT project failure, characteristics of project management, and various factors involved in IT projects' success. For example, managers would focus on factors, but the major problem is the interpretations and prediction of success. Everyone suggests different solutions to define project success, making research endless and limitless. Examining the cross-cultural differences gives us an idea of handling the projects. The main research objective is to examine the success and failure factors of IT projects in project management. The research methodology used is a qualitative survey conducted among project managers, team leaders, and the responses would be analyzed. Working environment, organization culture, management support are few critical aspects of any IT project. Thus, project management provides a specific emphasis defined by each project's priorities, finances, and schedule. This paper would help deliver a deeper understanding of the success and failure factors linked to IT projects and help the reader get a better understanding and develop new views as per the qualitative survey and research.

More from: American Economic Journal: Microeconomics
  • New
  • Research Article
  • 10.1257/mic.20230049
Dynamic Screening and the Dual Roles of Monitoring
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Dhruva Bhaskar

  • New
  • Research Article
  • 10.1257/mic.20230326
Social Learning and Strategic Pricing with Rating Systems
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Chia-Hui Chen + 2 more

  • New
  • Research Article
  • 10.1257/mic.20220220
Common Ownership and Market Entry: Evidence from the Pharmaceutical Industry
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Melissa Newham + 2 more

  • New
  • Research Article
  • 10.1257/mic.20240197
On the Alignment of Consumer Surplus and Total Surplus under Competitive Price Discrimination
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Dirk Bergemann + 2 more

  • New
  • Research Article
  • 10.1257/mic.20230116
Simple Manipulations in School Choice Mechanisms
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Ryo Shirakawa

  • New
  • Research Article
  • 10.1257/mic.20240141
Underestimating Learning by Doing
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Samantha Horn + 1 more

  • New
  • Research Article
  • 10.1257/mic.17.4.i
Front Matter
  • Nov 1, 2025
  • American Economic Journal: Microeconomics

  • New
  • Research Article
  • 10.1257/mic.20240078
Market Segmentation and Product Steering
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Stefan Terstiege + 1 more

  • New
  • Research Article
  • 10.1257/mic.20230282
Holding Platforms Liable
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Xinyu Hua + 1 more

  • New
  • Research Article
  • 10.1257/mic.20220133
Optimal Voting Mechanisms on Generalized Single-Peaked Domains
  • Nov 1, 2025
  • American Economic Journal: Microeconomics
  • Tobias Rachidi

Save Icon
Up Arrow
Open/Close
  • Ask R Discovery Star icon
  • Chat PDF Star icon

AI summaries and top papers from 250M+ research sources.

Search IconWhat is the difference between bacteria and viruses?
Open In New Tab Icon
Search IconWhat is the function of the immune system?
Open In New Tab Icon
Search IconCan diabetes be passed down from one generation to the next?
Open In New Tab Icon