Incentives and the structure of teams

This paper studies the relationship between moral hazard and the matching structure of teams. We show that team incentive problems may, on their own, generate monotone matching predictions in the absence of complementarities or anti-complementarities in production technology. We also derive sufficient conditions on the primitives of the model leading to the optimality of positive and negative matching of team members. We thank seminar participants at Penn State and the University of Toronto. Rotman School of Management, University of Toronto Rotman School of Management, University of Toronto Arizona State University