American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Delay and Deadlines: Freeriding and Information Revelation in Partnerships
American Economic Journal: Microeconomics
vol. 6,
no. 2, May 2014
(pp. 163–204)
Abstract
We study two sources of delay in teams: freeriding and lack of communication. Partners contribute to the value of a common project, but have private information about the success of their own efforts. When the deadline is far away, unsuccessful partners freeride on each others' efforts. When the deadline draws close, successful partners stop revealing their success to maintain their partners' motivation. We derive comparative statics results for common team performance measures and find that the optimal deadline maximizes productive efforts while avoiding unnecessary delays. Welfare is higher when information is only privately observable rather than revealed to the partnership.Citation
Campbell, Arthur, Florian Ederer, and Johannes Spinnewijn. 2014. "Delay and Deadlines: Freeriding and Information Revelation in Partnerships." American Economic Journal: Microeconomics, 6 (2): 163–204. DOI: 10.1257/mic.6.2.163Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- L26 Entrepreneurship
- M54 Personnel Economics: Labor Management
- O30 Technological Change; Research and Development; Intellectual Property Rights: General
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