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Project design with limited commitment and teams

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  • George Georgiadis
  • Steven A. Lippman
  • Christopher S. Tang

Abstract

type="main"> We study the interaction between a group of agents who exert effort to complete a project and a manager who chooses its objectives. The manager has limited commitment power so that she can commit to the objectives only when the project is sufficiently close to completion. We show that the manager has incentives to extend the project as it progresses. This result has two implications. First, the manager will choose a larger project if she has less commitment power. Second, the manager should delegate the decision rights over the project size to the agents unless she has sufficient commitment power.

Suggested Citation

  • George Georgiadis & Steven A. Lippman & Christopher S. Tang, 2014. "Project design with limited commitment and teams," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 598-623, September.
    • Handle: RePEc:bla:randje:v:45:y:2014:i:3:p:598-623
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    File URL: http://hdl.handle.net/10.1111/1756-2171.12064
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    Cited by:

    1. T. Renee Bowen & George Georgiadis & Nicolas S. Lambert, 2019. "Collective Choice in Dynamic Public Good Provision," American Economic Journal: Microeconomics, American Economic Association, vol. 11(1), pages 243-298, February.
    2. Sofia Moroni, 2019. "Experimentation in Organizations," Working Paper 6631, Department of Economics, University of Pittsburgh.
    3. Morvarid Rahmani & Guillaume Roels & Uday S. Karmarkar, 2018. "Team Leadership and Performance: Combining the Roles of Direction and Contribution," Management Science, INFORMS, vol. 64(11), pages 5234-5249, November.
    4. Bowen, T. Renee & Georgiadis, George & Lambert, Nicolas S., 2015. "Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority," Research Papers 3346, Stanford University, Graduate School of Business.
    5. Chia‐Hui Chen & Junichiro Ishida, 2018. "Dynamic performance evaluation with deadlines: The role of commitment," Journal of Industrial Economics, Wiley Blackwell, vol. 66(2), pages 377-422, June.
    6. Georgiadis, George, 2017. "Deadlines and infrequent monitoring in the dynamic provision of public goods," Journal of Public Economics, Elsevier, vol. 152(C), pages 1-12.
    7. Jakša Cvitanić & George Georgiadis, 2016. "Achieving Efficiency in Dynamic Contribution Games," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 309-342, November.
    8. Honryo, Takakazu, 2018. "Dynamic persuasion," Journal of Economic Theory, Elsevier, vol. 178(C), pages 36-58.
    9. Sofia Moroni, 2016. "Experimentation in Organizations," Working Paper 5876, Department of Economics, University of Pittsburgh.

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