CFDP 2020

Team Production, Endogenous Learning about Abilities and Career Concerns

Author(s): 

Publication Date: August 2015

Pages: 40

Abstract: 

This paper studies career concerns in teams where the support a worker receives depends on fellow team members’ effort and ability. In this setting, by exerting effort and providing support, a worker can influence her own and her teammates’ performances in order to bias the learning process in her favor. To manipulate the market’s assessments, we argue that in equilibrium, a worker has incentives to help or even sabotage her colleagues in order to signal that she is of higher ability. In a multiperiod stationary framework, we show that the stationary level of work effort is above and help effort is below their efficient levels.

Keywords: 

Career concerns, Team incentives, Incentives to help, Incentives to sabotage

JEL Classification Codes:  D83, J24, M54