SSE/EFI Working Paper Series in Economics and Finance
Amihai Glazer and Björn Segendorff
Reputation in Team Production
Abstract: Consider team production with two people. Each is
characterized by a prior distribution that he will do Right or Wrong. After
the outcome of the project is observed, these probabilities are updated.
When output depends on the weakest link in production, following project
failure the posterior probability that a person did Right declines with the
probability that the other worker did Right. The same holds when output
depends on the best shot in production and the team effort succeeded. A
leader concerned about his reputation may therefore prefer to work with a
person unlikely to do Right.
Keywords: Reputation; team; competence; (follow links to similar papers)
JEL-Codes: C72; D72; D82; J33; (follow links to similar papers)
16 pages, January 21, 2001, Revised March 1, 2001
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