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Incentives and Computing Systems for Team-Based Organizations: A Mathematical and Economic Analysis

Author

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  • Ugo Merlone

    (Statistics and Applied Mathematics Department, University of Turin, piazza Arbarello 8, I-10122 Turin, Italy)

Abstract

This paper provides a mathematical and economic analysis “Incentives and Computing Systems for Team-Based Organizations” by A. Barua, C. H. Sophie Lee, and A. B. Whinston, which was published in Organization Science in 1995. Several points were not adequately stated in the original article and one of the key definitions is not clear, nor is it in keeping with the classical theory of production. Although the Cobb-Douglas production function is often used in the article, it does not comply with the article's definitions. The two main contributions of this paper are (1) to provide a word of caution to other readers who might try to extend Barua et al. (1995) and (2) to suggest alternative formulations and directions for future research.

Suggested Citation

  • Ugo Merlone, 2002. "Incentives and Computing Systems for Team-Based Organizations: A Mathematical and Economic Analysis," Organization Science, INFORMS, vol. 13(6), pages 734-736, December.
    • Handle: RePEc:inm:ororsc:v:13:y:2002:i:6:p:734-736
    DOI: 10.1287/orsc.13.6.734.500
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    File URL: http://dx.doi.org/10.1287/orsc.13.6.734.500
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    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Green, Jerry R & Stokey, Nancy L, 1983. "A Comparison of Tournaments and Contracts," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 349-364, June.
    3. Dilip Mookherjee, 1984. "Optimal Incentive Schemes with Many Agents," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 433-446.
    4. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    5. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    6. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
    7. Anitesh Barua & C.-H. Sophie Lee & Andrew B. Whinston, 1995. "Incentives and Computing Systems for Team-Based Organizations," Organization Science, INFORMS, vol. 6(4), pages 487-504, August.
    8. James M. Malcomson, 1986. "Rank-Order Contracts for a Principal with Many Agents," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 807-817.
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    Cited by:

    1. Arianna Dal Forno & Ugo Merlone, 2021. "Envy effects on conflict dynamics in supervised work groups," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 755-779, December.

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