Kosfeld, M.

von Siemens, F.

English

Team production is a frequent feature of modern production processes. Combined with team incentives, team production creates externalities among workers as workers' utility upon accepting a contract depends on their colleagues' productivity. We study the effects of such externalities in a competitive labor market if workers have private information on their productivity. We find that in any competitive equilibrium there is Pareto-effcient separation of workers according to their productivity. We further find that externalities facilitate equilibrium existence, where arbitrarily small externalities can be suffcient to guarantee existence

International Migration, Integration and Social Cohesion online publications

Team production in competitive labor markets with adverse selection

https://pure.uva.nl/ws/files/1282341/112953_347225.pdf

Team production in competitive labor markets with adverse selection

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International Migration, Integration and Social Cohesion online publications