The impacts of distribution mechanisms and information disclosures on team dynamics

In this paper, we propose a model of team formation and study the effects of income distribution mechanisms and information disclosure on team dynamics and team performance. In our model, heterogeneous agents dynamically join and leave teams by maximizing their welfare. Each agent has a knowledge endowment (a vector) and a preference for income and leisure (spare time). Agents provide a variable input (effort) and all their knowledge endowments to team production and share team output as income based on different distribution mechanisms. There are increasing returns of production to cooperation, and agents are self-organized into productive coalitions. Moreover, an agent could learn from others in its team to improve its knowledge level and adjust its effort level periodically to maximize its welfare non-cooperatively. In our model, agents only concern their welfare when joining a team, they are allowed to join other teams of their friends or work alone when it is welfare maximizing to do so. We demonstrate the impacts of income distribution mechanisms and social connections on the team formation via simulations.