Matching to Produce Information

We study endogenous team formation inside research organizations through the lens of a one-sided matching model with non-cooperative after-match information production. Using our characterization of the equilibria of the production game, we show that equilibrium sorting of workers into teams may be inefficient. Asymmetric effort inefficiency occurs when a productive team is disrupted by a worker who chooses to join a less productive team because there is an equilibrium played inside that team in which she exerts relatively less effort. Stratification inefficiency occurs when a productive team forms, but generates a significant negative externality on the productivity of other teams.

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