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Will You Work or Will You Shirk? How Expectations About Teammates Influence Team Performance

This paper introduces heterogeneity of team members’ preferences towards inequality of effort choices. While some prefer working more than their teammates (“worker-types”) others prefer working less (“shirker-types”). Extending Fehr and Schmidt (1999) we assume that these preferences are private knowledge and team members form expectations about teammates’ preferences. A simple theoretical model identifies the interplay of expected preferences and optimum effort choices in a Bayesian Nash equilibrium, its predictions are partly supported by data from a real-effort experiment. We find that expecting worker-type teammates can spur team performance, providing a strong argument for team building measures.