Ejercicio 6 - Open Question 2 · Economia de L'empresa UPF 2016

What is a key problem with teams? What are organizational solutions to cope with this problem and how does team size influence the efficiency of these solutions? (8 points)

Solución: 1. Key Problem: The Free-Rider Problem (Social Loafing / Moral Hazard in Teams). 2. Organizational Solutions: Specialized Monitoring and Residual Claimancy; Incentive Schemes and Individual Performance Metrics; Mutual Monitoring and Organizational Culture. 3. Influence of Team Size: As $N$ expands, private return drops ($1/N$), anonymity increases, and monitoring costs escalate rapidly.