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Effort Provision in Entrepreneurial Teams:Effects of Team Size, Free-Riding and Peer Pressure


Backes-Gellner, Uschi; Werner, Arndt; Mohnen, Alwine (2005). Effort Provision in Entrepreneurial Teams:Effects of Team Size, Free-Riding and Peer Pressure. ISU Working Paper 54, University of Zurich.

Abstract

This paper analyzes whether effort provision in entrepreneurial teams depends on the size of the team, assuming that size determines the strength of free-ridingand peer pressure effects in entrepreneurial teams. We provide a theoretical model and empirical analyses to explain the joint effect of free-riding and peer pressure on effort in start-up teams. We begin with an economic model by Kandel and Lazear (1992) and enrich it using insights from entrepreneurship research. Based on our model,we first hypothesize that with increasing team size in entrepreneurial teams, the efforts of the individual team founders should follow an inverted U-shaped pattern. Second, we argue that the peer pressure effect is stronger if team members have stronger social ties,and thus we expect the effort-maximizing team size to be larger in teams with stronger social ties.Using a data set from 214 German start-up teams, we find that our hypotheses aresupportedby the data.

Abstract

This paper analyzes whether effort provision in entrepreneurial teams depends on the size of the team, assuming that size determines the strength of free-ridingand peer pressure effects in entrepreneurial teams. We provide a theoretical model and empirical analyses to explain the joint effect of free-riding and peer pressure on effort in start-up teams. We begin with an economic model by Kandel and Lazear (1992) and enrich it using insights from entrepreneurship research. Based on our model,we first hypothesize that with increasing team size in entrepreneurial teams, the efforts of the individual team founders should follow an inverted U-shaped pattern. Second, we argue that the peer pressure effect is stronger if team members have stronger social ties,and thus we expect the effort-maximizing team size to be larger in teams with stronger social ties.Using a data set from 214 German start-up teams, we find that our hypotheses aresupportedby the data.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:Peer Pressure, Free-Riding, Entrepreneurial Teams, Team Size
Language:English
Date:2005
Deposited On:11 Apr 2013 09:22
Last Modified:18 Mar 2022 10:46
Series Name:ISU Working Paper
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Official URL:https://ideas.repec.org/p/iso/wpaper/0054.html
Related URLs:https://www.zora.uzh.ch/id/eprint/102330/
Other Identification Number:merlin-id:4065

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