We propose an intergroup competition scheme (ICS) to theoretically solve free-riding in team production and provide experimental evidence from a voluntary contribution mechanism (VCM) public goods game. The ICS includes an internal transfer payment from the lowest to highest contributing team...

We analyze the contracting structure in a moral hazard setting with several agents where output is produced jointly and is the only contractible variable. Since the salary of each agent is a function of all agents efforts, a positive externality arises between them. This externality is not...

This paper analyzes the impact of wage comparisons among inequity-averse agents on optimal incentive intensities in a linear–exponential–normal moral hazard model with multi-tasking. We consider individual and team production tasks that differ in that only individual production causes wage...

We investigate the problem of setting revenue sharing rules in a team production environment with a principal and two agents. We assume that the project output is binary and that the principal can observe the level of agents' actual effort, but does not know the production function. Identifying...

In a model with democratic institutions and three jurisdictions, we study the allocation and welfare in a one-level (unitary) and a two-level (federal) government, given that the central government finds it optimal to discriminate in favor of two jurisdictions and against the third. Favored...