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Fostering collaboration

Author

Listed:
  • Deb, Joyee

    (Department of Economics, New York University)

  • Kuvalekar, Aditya V.

    (Department of Economics, University of Essex)

  • Lipnowski, Elliot

    (Department of Economics, Yale University)

Abstract

We study project selection and development by a principal, interacting with two agents each of whom wants their respective project selected. When the best choice is uncertain, keeping both projects alive gives the principal the ability to adapt its choice in the future, but implies an efficiency loss of effort being spent on the project finally not chosen. We show a time-varying threshold rule is uniquely optimal: the principal selects the first project to achieve a sufficient lead. The optimum entails initial competition, always followed by permanent collaboration. Our proof uses martingale time-change methods applying weak solutions.

Suggested Citation

  • Deb, Joyee & Kuvalekar, Aditya V. & Lipnowski, Elliot, 0. "Fostering collaboration," Theoretical Economics, Econometric Society.
    • Handle: RePEc:the:publsh:5742
    as

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    More about this item

    Keywords

    Project selection; internal competition; team production; collaboration; mechanism design without transfers;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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