Holmstrom (1982) considered a group of agents who jointly produce some output and showed that if the agents are required to balance the budget then the first best, or Pareto efficient, allocation cannot be obtained as an equilbrium relative to any sharing rule. Recent research on risk-neutral...

We analyse the production of knowledge in research teams. Individuals put in effort, which is not enforcable. Effort increases the probability of a successful outcome. Research with enforcable effort displays increasing returns to scale; these scale economies are limited, or even reversed, by the...

This paper studies the effects of learning by observation on the production and wage decisions of a firm . Workers can improve their productivity by observing others within the firm. The firm chooses a wage profile, which determines the amount of research done within the firm. Some workers may...

In a number of evolutionary models the presence of mutations, or random components of choice, serve to refine predictions of long-run behavior. We analyze the effects of mutation rates that vary because of the presence of imitation. A full characterization of long-run outcomes is provided for...