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Birds of a Feather: Teams as a Screening Mechanism

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  • Breton, Michèle
  • St-Amour, Pascal
  • Vencatachellum, Désiré

Abstract

This paper studies the informational content of elective teams in a dynamic principal/multiple-agents framework with adverse selection. Two agents with different employment histories are paid their conditional expected marginal product. They observe their types (good or bad), and choose between working together or separately. We characterize the distributions on agents' types, nature and wages such that teams are formed exclusively by good-type agents, with and without side payments. As employment records matter when idiosyncratic contributions are difficult to isolate, a good-type agent prefers not to jeopardize his reputation by teaming up with a bad-type agent. Cet article étudie le contenu informationel des équipes facultatives, dans le cadre d'un modèle dynamique de principal-agent avec sélection adverse. Deux agents ayant des historiques d'emploi différents reçoivent leur produit marginal espéré conditionnel. Ils observent leurs types (bon ou mauvais) et doivent décider s'ils veulent travailler ensemble ou séparément. Nous caractérisons la distribution sur les types, les chocs de la nature et les salaires pour lesquelles des équipes sont formées exclusivement par deux agents de bon type, avec ou sans paiements latéraux. Parce que les dossiers d'emploi sont valorisés lorsque les contributions individuelles sont difficiles à évaluer, un agent de bon type refuse de mettre en péril sa réputation en formant une équipe avec un agent de mauvais type.

Suggested Citation

  • Breton, Michèle & St-Amour, Pascal & Vencatachellum, Désiré, 1998. "Birds of a Feather: Teams as a Screening Mechanism," Cahiers de recherche 9808, Université Laval - Département d'économique.
    • Handle: RePEc:lvl:laeccr:9808
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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