Evolution in Teams

Nov 2003 | 177

Authors: David P. Myatt, Chris Wallace


Team formation will often involve a coordination problem. If no-one else is contributing to a team, there is little point in an agent exerting any effort. Similarly, once a team is formed, an agent within the team will not leave, as to do so would result in team collapse; non-contributing agents would not join, as they currently receive the benefits of the team`s efforts whilst paying none of the costs. The methods of the stochastic adjustment dynamics literature can help select between these equilibria. Team and population size, and cost and benefit parameters all play a role in determining the chances of successful team formation. Increasing the pool of agents from which to choose team members seems at first glance to have a positive impact upon team formation. However, just one bad apple within the extended pool can have a disproportionate effect on the outcome. Although an agent with high participation costs would never contribute to a successful team, their mere presence alone can result in the failure of an otherwise successful team.

JEL Codes: C72, C73, H41

Keywords: collective action, evolution, teamwork, equilibrium selection


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