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(<b>Notes about assumptions</b>: * The prompt does not explicitly say that everyone must receive the same share. Nonetheless, many of the relevant papers assume that this is the case. As such, will solve the problem both ways. * The prompt also does not explicitly require a) Assuming balanced budget. However, no source of funding for the agents is mentioned besides the combined output V of the individual agents. As such, I will assume that some shares can be differentthe budget balance restriction must hold.
BPP Field Exam 2010 Answers (view source)
Revision as of 17:33, 28 March 2011
, 17:33, 28 March 2011no edit summary
===Question B1: Production in Teams===
<b>Relevant papers</b>: * [[http://www.jstor.org/stable/pdfplus/3003457.pdf?acceptTC=true] Holmstrom (1982), Moral Hazard in Teams]. Not on reading list. * [[http://www.edegan.com/wiki/index.php/Holmstrom_%281999%29_-_The_Firm_As_A_Subeconomy] Holmstrom (1999), Firm as Subeconomy], not on reading list.
1. The prompt does not explicitly say that everyone must receive the same share. Nonetheless, many of the relevant papers assume that this is the case. As such, will solve the problem both ways.
(a) <b>My answer, assuming that some shares can be different</b>. (b) Assuming <b>My answer, assuming that all shares must be equal</b>.
2.
