Team Dynamics Where Followers Have Illusion about Guide

A team is assigned to accomplish a task in each infinitely-repeated period. The guide of the team and his followers are allowed to have asymmetric productivity; also the followers have either a hostile or favorable illusion toward the guide. Respective efforts and the followers¡¯ illusion are private information. At the end of each period, the output of the joint task emerges and the followers evaluate the guide. The analysis shows (1) that potential for an unreasonable evaluation suppresses the guide¡¯s effort down to an average level; (2) letting the followers inform the guide of their illusion in advance increases both sides¡¯ payoffs; (3) abolishing the evaluation reduces both sides¡¯ payoffs in general; and (4) however, if the magnitude of the followers¡¯ hostile llusion weighted by its relative probability is enormous, abolishing the evaluation increases the output and the guide¡¯s payoff.