Jump to ContentJump to Main Navigation
Dimensions of Economic Theory and PolicyEssays for Anjan Mukherji$
Users without a subscription are not able to see the full content.

Krishnendu Ghosh Dastidar, Hiranya Mukhopadhyay, and Uday Bhanu Sinha

Print publication date: 2011

Print ISBN-13: 9780198073970

Published to Oxford Scholarship Online: September 2012

DOI: 10.1093/acprof:oso/9780198073970.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 03 December 2020

Coordination in Teams

Coordination in Teams

(p.208) 13 Coordination in Teams
Dimensions of Economic Theory and Policy

Tridib Sharma

Ricard Torres

Oxford University Press

The theory of the firm has emphasized the importance of some agents that coordinate the activities of others in organizations. This chapter presents a natural framework which formalizes this idea. It describes a model of team production with a moral hazard a la Alchian-Demsetz-Holmstrom. In order to credibly implement the collective punishments required to achieve the first best, an owner (residual claimant) is required. This owner brings about coordination through incentives embedded in contracts. The chapter shows that under borrowing or minimum wage constraints, even the existence of an owner may not guarantee the implementability of the (constrained) first best. Under such conditions, a welfare-improving solution can be achieved if an external agent coordinates the activities of the workers by directing them to certain actions, thus implementing a correlated equilibrium.

Keywords:   theory of the firm, coordination, agents, moral hazard, Alchian-Demsetz-Holmstrom model, incentives, contracts, first best, team production, correlated equilibrium

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .