Who gets the credit? Credit attribution, spillovers, and inefficiency in teams

Abstract

We examine team incentives in environments with positive spillovers and rewards based on ex-post public credit for collective success. Compared to the ex-ante efficient credit allocation that maximizes the team's overall payoff, ex-post credit distorts individual incentives: higher-ability or lower-cost agents receive excessive credit and overexert effort when spillovers are low, but are under-credited and insufficiently motivated when spillovers are high. To address these inefficiencies, organizations may optimally limit spillovers by restricting peer communication or reducing transparency in teamwork. Moreover, concerns about credit-sharing can deter agents from inviting collaborators or selecting the most capable partners when leading projects.