Team production with inequity-averse agents |
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| Authors: | Jianpei Li |
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| Affiliation: | (1) University of International Business and Economics, East Huixin Street 10, Beijing, 100029, China |
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| Abstract: | ![]()
This paper analyzes the efficiency of team production when risk-neutral agents exhibit other-regarding preferences. It is shown that full efficiency can be sustained as an equilibrium of a budget-balancing mechanism that punishes some randomly chosen agents if output falls short of the efficient level but distributes output equally otherwise. The result depends on agents being sufficiently inequity-averse. |
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| Keywords: | Moral hazard Team production Inequity aversion |
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