The team allocator game: Allocation power in public goods games

Abstract

We analyze linear, weakest-link and best-shot public goods games where a distinguished team member, the team allocator, has property rights over the benefits from the public good to distribute it among team members. Our team allocator games are intended to capture natural asymmetries in hierarchical teams facing social dilemmas, such as those in work teams. We show that introducing a team allocator leads to increased contributions in linear and best-shot public-good games. No effect can be found in the weakest-link public good. The team allocator uses her power to distribute benefits in a way that motivates people to contribute. Re-allocating team payoffs allows her to reward contributing team members and to sanction non-cooperating members at no efficiency losses from explicit sanctioning costs. Thus, team profits are higher in the linear team allocator game but not in the best-shot case, where coordination problems lower the welfare for the remaining team members.