Efficient Inequity-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
Authors:	Li, Jianpei
Publisher:	München : Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Subject:	moral hazard \| team production \| inequity aversion

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Series:	SFB/TR 15 Discussion Paper ; 210
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.5282/ubm/epub.13342 [DOI] 78357973X [GVK] hdl:10419/94030 [Handle] RePEc:trf:wpaper:210 [RePEc]
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:	EconStor

Persistent link: https://www.econbiz.de/10010334007

Efficient Inequity-Averse Teams

Efficient Inequity-Averse Teams