Large Teams Boost Wealth by Efficiently Using Information in Contracts
The article explores how to design contracts when a boss has to manage many workers who can affect each other's performance. Even without direct connections between the workers, having a large team can make it easier for the boss to motivate everyone effectively. This means it's better for each worker's pay to be based on the whole team's performance, not just their own. The study shows that simple contracts work well in big teams, making them look like regular boss-worker agreements. This research suggests that having a lot of workers in one group can help use information better and create more wealth.