American Economic Journal: Microeconomics
no. 4, November 2019
We show that team formation can serve as an implicit commitment device to overcome problems of self-control. If individuals have present-biased preferences, effort that is costly today but rewarded at some later point in time is too low from the perspective of an individual's long-run self. If agents interact repeatedly and can monitor each other, a relational contract involving teamwork can help to improve performance. The mutual promise to work harder is credible because the team breaks up after an agent has not kept this promise, which leads to individual underproduction in the future, reducing future utility.
Fahn, Matthias, and Hendrik Hakenes.
"Teamwork as a Self-Disciplining Device."
American Economic Journal: Microeconomics,
Consumer Economics: Theory
Social Choice; Clubs; Committees; Associations
Economics of Contract: Theory
Personnel Economics: Labor Management