Public good provision in inter-team conflicts: Effects of asymmetry and profit-sharing rule

Tamar Kugler, Amnon Rapoport, Asya Pazy

Research output: Contribution to journalArticlepeer-review

21 Scopus citations

Abstract

A fundamental problem in organizations is designing mechanisms for eliciting voluntary contributions from individual members of a team who are entrapped in a social dilemma. To solve the problem, we utilize a game-theoretical framework that embeds the traditional within-team social dilemma in a between-team competition for an exogenously determined prize. equilibrium, such competition enhances the incentive to contribute, thereby reducing free-riding. Extending existing literature, we focus on asymmetric competitions between teams of unequal size, and competitions between more than two teams. Comparing two protocols for sharing the prize-egalitarian and proportional profit-sharing rules-we find that (i) free-riding diminishes and (ii) team members contribute more toward their team's effort when they belong to the larger team and when the profit-sharing rule is proportional. (iii) Additionally, under the egalitarian profit-sharing rule team members contribute more than predicted by the equilibrium solution. We discuss implications of our findings for eliciting contributions in competitive environments.

Original languageEnglish (US)
Pages (from-to)421-438
Number of pages18
JournalJournal of Behavioral Decision Making
Volume23
Issue number4
DOIs
StatePublished - Oct 2010

Keywords

  • Game theory
  • Public goods
  • Reward systems
  • Social dilemmas
  • ter-team competition

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Sociology and Political Science
  • Strategy and Management

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