Who fares better in teamwork?

Abstract

AbstractThis article establishes a tenuous link between ability and relative well‐being in teamwork. It shows that higher‐ability or lower‐cost members can easily fare worse than their lower‐ability counterparts due to free‐riding. The extent of free‐riding hinges crucially on log‐concavity of effort cost, which its convexity restricts little. The article further shows how to compose teams that allocate effort efficiently and equalize payoffs in equilibrium. Efficient teams must have sufficiently diverse abilities and sizes at most the number of cost log‐inflections plus one. These findings can explain the evidence of a significant dislike for teamwork in the workplace and classroom.