Delay and deadlines: freeriding and information revelation in partnerships

Arthur Campbell, Florian Ederer, Johannes Spinnewijn

Research output: Contribution to journalArticleResearchpeer-review

12 Citations (Scopus)

Abstract

We study two sources of delay in teams: freeriding and lack of communication. Partners contribute to the value of a common project, but have private information about the success of their own efforts. When the deadline is far away, unsuccessful partners freeride on each others' efforts. When the deadline draws close, successful partners stop revealing their success to maintain their partners' motivation. We derive comparative statics results for common team performance measures and find that the optimal deadline maximizes productive efforts while avoiding unnecessary delays. Welfare is higher when information is only privately observable rather than revealed to the partnership.
Original languageEnglish
Pages (from-to)163-204
Number of pages42
JournalAmerican Economic Journal: Microeconomics
Volume6
Issue number2
DOIs
Publication statusPublished - May 2014
Externally publishedYes

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