Implementation and information in teams

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

A risk-neutral principal hires risk-averse agents to work in a team production process. Each agent can observe the actions taken by some subset of the other agents, and (perhaps) the realization of a random variable which is correlated with output. The principal cannot observe actions or the random variable. However, the agents can communicate with the principal, and final output is verifiable. We characterize the information structures that make it possible for the principal to implement his first best. In general it will be desirable to restrict the information available to the agents. If the first best can be implemented, then it can be implemented by a very simple mechanism, in which each agent forecasts the team output, but sends no other message.

Original languageEnglish (US)
Pages (from-to)327-341
Number of pages15
JournalEconomic Design
Volume1
Issue number1
DOIs
StatePublished - Dec 1994
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Keywords

  • D71
  • Implementation
  • Teams

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