Sharing Rules in Teams

Inequality and Inefficiency in Joint Projects

“…This assertion is similar to the main result in Nandeibam (2002), who shows that a similar replacement can be made in a team problem. However, Nandeibam works with more general concave utilities and obtains a weaker result: the sufficiency of the broader class of all affine functions 9 .…”

Efficient Tournaments within Teams

“…By restricting attention to this implicitly linear contract we do not actually lose generality, as is shown for risk-neutral agents by Nandeibam (2002). 14 Assuming the existence of interior solutions, maximizing the above implies for i = 1, 2, that f i e i e j 1 e j (2s − 1)y(e i + e j )…”

Efficient tournaments within teams

“…▪ ▪ We now show that in the general setup, full efficiency is attainable for general concave (including linear) production functions and a large class of ranking technologies. Recall the production technology Given the sharing rule s and partner j 's effort of e j , partner i 's expected utility from exerting effort e i is By restricting attention to this implicitly linear contract we do not actually lose generality, as is shown for risk‐neutral agents by Nandeibam (2002) 14 . Assuming the existence of interior solutions, maximizing the above implies for i = 1, 2, that Given j 's effort e j , implies that marginally increasing effort e i has three effects: (i) a marginal increase of final output, (ii) a marginal increase of partner i 's winning probability, and (iii) a marginal increase of effort cost.…”