European Business Schools Librarian's Group

ESSEC Working Papers,
ESSEC Research Center, ESSEC Business School

No WP1603: Harmful transparency in teams

Kanti Parimal Bag and Nona Pepito ()
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Kanti Parimal Bag: National University of Singapore, Faculty of Arts and Social Sciences, Department of Economics
Nona Pepito: Essec business school

Abstract: In a two-period continuous effort investment game as in Mohnen, et al. (2008), we demonstrate that peer transparency can be strictly harmful. This contrasts with Mohnen et al.'s result that transparency, through the observability of interim efforts, induces more effort and is thus beneficial if team members are inequity-averse. If, instead, preferences are standard utilitarian, the marginal benefit is decreasing and marginal cost is increasing in a player's own effort, then players' collective and individual efforts are strictly less with transparency than under non-transparency.

Keywords: free-riding; transparency; team; perfect substitution

JEL-codes: D02

7 pages, January 26, 2016

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