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Sharing and Anti-Sharing in Teams

Author

Listed:
  • Roland Kirstein

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Robert D. Cooter

Abstract

Compared to budget-balanced Sharing contracts, Anti-Sharing may improve the efficiency of teams. The Anti-Sharer collects a fixed payment from all team members; he receives the actual output and pays out its value to them. If a team members becomes Anti-Sharer, he will be unproductive in equilibrium. Hence, internal Anti-Sharing fails to yield the first-best outcome. Anti-Sharing is more likely to yield a higher team profit than Sharing, the larger the team, the curvature of the production function, or the marginal effort cost. Sharing is more likely to be better, the greater the marginal product, the cross-partials of the production function, or the curvature of the effort cost.

Suggested Citation

  • Roland Kirstein & Robert D. Cooter, 2007. "Sharing and Anti-Sharing in Teams," FEMM Working Papers 07001, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  • Handle: RePEc:mag:wpaper:07001
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    File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2007_Dateien/2007_01.pdf
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    References listed on IDEAS

    as
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    3. Strausz, Roland, 1999. "Efficiency in Sequential Partnerships," Journal of Economic Theory, Elsevier, vol. 85(1), pages 140-156, March.
    4. Cooter, Robert & Porat, Ariel, 2002. "Anti-insurance," The Journal of Legal Studies, University of Chicago Press, vol. 31(2), pages 203-232, June.
    5. Vives, Xavier, 2004. "Complementarities and Games: New Developments," CEPR Discussion Papers 4742, C.E.P.R. Discussion Papers.
    6. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
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    8. Cooter, Robert D. & Porat, Ariel, 2002. "Anti-Insurance," Berkeley Olin Program in Law & Economics, Working Paper Series qt1vw0d9sf, Berkeley Olin Program in Law & Economics.
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    Cited by:

    1. Bose, Arup & Pal, Debashis & Sappington, David E.M., 2010. "Asymmetric treatment of identical agents in teams," European Economic Review, Elsevier, vol. 54(7), pages 947-961, October.
    2. Kirstein, Roland & Cooter, Robert D, 2006. "Anti-Sharing as a Theory of Partnerships and Firms," Berkeley Olin Program in Law & Economics, Working Paper Series qt4441r9r1, Berkeley Olin Program in Law & Economics.

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    More about this item

    Keywords

    Budget-breaker; supermodularity; constrained efficiency;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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