Competition for leadership in teams

Mauleon, Ana [USL-B] Schopohl, Simon [USL-B] Vannetelbosch, Vincent [UCL]

We analyze a model of information centralization in teams where players can only exchange information through an endogenous network. Over several periods each player can either pass or not pass her information to her neighbors. Once one player has centralized all the information, all players receive some payoff. The winner who collects all the information gets an additional reward. Since each player discounts payoffs over time, she faces the dilemma of either letting another player centralizing all the information fast, or trying to collect all the information by herself and to overtake the leadership. We find that there is always a single winner who centralizes the information at equilibrium and that only minimally connected networks can be pairwise stable. We also characterize the winner and the duration for any network and for any discount factor. We show that the star network is always pairwise stable. More surprisingly, we find that even networks in which the centralization takes a long time can be pairwise stable.