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Resolving the Group Project Dilemma
Three colleagues are assigned a group project. Each can choose to 'Work' or 'Not Work'. Working costs an individual £40 but adds £90 to a total project fund. Not working has no cost and adds nothing. The final project fund is divided equally among all three, regardless of who worked. This structure often leads to a poor outcome where no one works. Propose one specific change to the project's rules or reward system that would make it more likely for all three colleagues to choose 'Work'. Justify your proposal by explaining how it alters the financial incentives for an individual.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.4 Strategic interactions and social dilemmas - The Economy 2.0 Microeconomics @ CORE Econ
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Three colleagues are assigned a group project where the total output is divided equally among them. Each colleague can independently choose to either 'Work' or 'Not Work'.
- If a colleague chooses to 'Work', they incur a personal cost of £40 and contribute £90 to the total project output.
- If a colleague chooses to 'Not Work', they incur no cost and contribute nothing to the total output.
From a purely individual financial perspective, what is the best choice for one of the colleagues, and why?
Calculating Payoffs in a Group Project
Group Project Payoff Analysis
Resolving the Group Project Dilemma
Consider a workplace group project with three colleagues where the total output is divided equally among them. Each colleague can independently choose to 'Work' (personal cost of £40, adds £90 to total output) or 'Not Work' (no cost, no output).
True or False: In any outcome where there is at least one person working and at least one person not working, an individual who chose to 'Work' will have a lower personal payoff than an individual who chose to 'Not Work'.
Three colleagues are assigned a group project where the total output is divided equally among them. Each colleague can independently choose to 'Work' (incurring a personal cost of £40 and adding £90 to the total output) or 'Not Work' (no cost, no output). Match each individual's situation to their correct personal payoff.
Consider a workplace project where each person's effort adds £90 to the total output at a personal cost of £40. The total output is shared equally among all members. For an individual's personal payoff from their own work to exceed their personal cost, the group must contain no more than ____ members.
Three colleagues are in a group project where the total output is divided equally. Each can choose to 'Work' (costing them £40 but adding £90 to the total output) or 'Not Work' (no cost, no output). Arrange the following scenarios in order from the lowest total payoff for the entire group to the highest.
Analyzing Incentives in a Group Project
Evaluating a Proposed Solution to a Workplace Dilemma