Working Paper: CEPR ID: DP5308
Authors: Gerd Muehlheusser; Andreas Roider
Abstract: In this paper we analyse the frequently observed phenomenon that (i) some members of a team ('black sheep') exhibit behaviour disliked by other (honest) team members, who (ii) nevertheless refrain from reporting such misbehaviour to the authorities (they set up a 'wall of silence'). Much cited examples include hospitals and police departments. In this paper, these features arise in equilibrium. An important ingredient of our model are benefits that agents receive when cooperating with each other in a team. Our results suggest that teams in which the importance of these benefits varies across team members are especially prone to the above mentioned phenomenon.
Keywords: asymmetric information; misbehaviour; teams; wall of silence
JEL Codes: C73; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reputational concerns (M14) | Decision to report (C52) |
| Decision to report (C52) | Level of misbehavior (K40) |
| Level of misbehavior (K40) | Establishment of a wall of silence (F55) |
| Anticipation of a wall of silence (D84) | Level of misbehavior (K40) |
| Walls of silence are more likely in teams where cooperation benefits vary significantly among members (C71) | Establishment of a wall of silence (F55) |
| Greater benefits from cooperation for honest members than for black sheep (C71) | Walls of silence are more likely in teams (C92) |