Efficient Inequityâ€“Averse Teams

This paper analyzes the efficiency of team production when agents exhibit other regarding preferences. It is shown that full efficiency can be sustained as an equilibrium through a budget-balancing mechanism that punishes some randomly chosen agents if output falls short of efficient level but distributes the output equally otherwise, provided that the agents are sufficiently inequity averse.

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Year of publication:	2007-05
Authors:	Li, Jianpei
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	moral hazard \| team production \| inequity aversion

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Extent:	application/pdf
Series:	Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems.
Type of publication:	Book / Working Paper
Classification:	C7 - Game Theory and Bargaining Theory ; D7 - Analysis of Collective Decision-Making ; D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; L2 - Firm Objectives, Organization, and Behavior
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005739677