Disclosure and Incentives in Teams

TL;DR

This paper analyzes how team members disclose outcomes in environments driven by career concerns, revealing that partial disclosure can enhance individual effort incentives and that deliberation protocols significantly influence these incentives.

Contribution

It characterizes equilibrium disclosure strategies in team settings with heterogeneous reputational effects and explores how different deliberation protocols impact effort incentives.

Findings

Partial disclosure often occurs in equilibrium.

Certain deliberation protocols maximize effort incentives.

Unilateral decision protocols can be optimal in specific environments.

Abstract

We consider a team-production environment where all participants are motivated by career concerns, and where a team's joint productive outcome may have different reputational implications for different team members. In this context, we characterize equilibrium disclosure of team-outcomes when team-disclosure choices aggregate individual decisions through some deliberation protocol. In contrast with individual disclosure problems, we show that equilibria often involve partial disclosure. Furthermore, we study the effort-incentive properties of equilibrium disclosure strategies implied by different deliberation protocols; and show that the partial disclosure of team outcomes may improve individuals' incentives to contribute to the team. Finally, we study the design of deliberation protocols, and characterize productive environments where effort-incentives are maximized by unilateral decision protocols or more consensual deliberation procedures.