The Market for Talent: Competition for Resources and Self Governance

“The Market for Talent: Competition for Resources and Self Governance”  
Abhijit Ramalingam, University of East Anglia; M.T. Aditya Srinivasan, Berklee College of Music; Brock V. Stoddard, University of South Dakota; and James M. Walker, Indiana University

Free-riding is a ubiquitous problem in social dilemmas and leads to severe and persistent losses in efficiency. Solutions proposed to raise cooperation levels within groups and teams include sanctioning or punishment and inter-group competition for rewards. These solutions are interventionist in that they change incentive structures to modify behavior. By contrast, we propose to examine the effectiveness of competition inherent in the production process which does not require the imposition of additional mechanisms, changes in the payoff/incentive structures or the intervention of designers. (For example, think of teachers at a particular public school as a team, delivering ‘education’ for the students. Suppose, however, that different schools compete for teachers who are free to move between schools in response to each school’s demand.) One way members could attract new members to their team is to increase their input (and hence their output), thus signaling higher earnings potential in their team. That is, interaction between teams in a naturally occurring ‘market for talent’ can itself provide a boost to team effort. Our experiment will examine competition in the market for talent where teams compete over the resources of a common member. To capture the dynamic nature of team composition, we will include treatments wherein members can ‘opt out’ of a team in favor of solo careers and where members can vote to ostracize team members.