On the Case of Shirking in Optimal Contracts for Teams

초록

The paper presents a team production model where an agent has private information about his type and his teammate has no such private information. Under an optimal contract for the team that can induce truthful contributions by both agents, the paper finds a shirking equilibrium in which the agent without private information shirks and the agent with private information picks up the slack. It identifies potential costs when forming a team with different agents in their possession of private information.

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