Generalized sharing, membership size and pareto efficiency in teams

Theory and Decision 48 (1):47-60 (2000)


We first show that the Generalized Sharing mechanism which is exhaustive, allows a team of identical members voluntarily supplying the observable effort to attain Pareto efficient production under increasing returns provided team size is allowed to vary. We then show that where true effort is imperfectly observable (moral hazard) Pareto efficient production under nonconstant returns to scale is still attainable by varying team size

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