Career Concerns in Teams

Emmanuelle Auriol; Guido Friebel; Lambros Pechlivanos

doi:10.1086/338240

Career Concerns in Teams

Emmanuelle Auriol¹; Guido Friebel^1,2; Lambros Pechlivanos³

¹ Institut d'Économie Industrielle · ² Centre for Economic Policy Research · ³ Foundation for Economic and Industrial Research, Athens

Journal of Labor Economics 2002

We investigate how changes in the commitment power of a principal affect cooperation among agents who work in a team. When the principal and her agents are symmetrically uncertain about the agents’ innate abilities, workers have career concerns. Then, unless the principal can commit herself to long‐term wage contracts, an implicit sabotage incentive emerges. Agents become reluctant to help their teammates. Anticipating this risk, and in order to induce the desired level of cooperation, the principal offers more collectively oriented incentive schemes. Temporary workers, though, are not affected by the sabotage effect, and their incentives are more individually oriented.

DOI: 10.1086/338240
Volume: 20 (2)
Pages: 289-307
Language: en
Export: BibTeX
Sources: openalex crossref