But completely effective control cannot
be expected from individualized market
competition for two reasons. First, for
this competition to be completely effective,
new challengers for team membership
must know where, and to what extent,
shirking is a serious problem, i.e., know
they can increase net output as compared
with the inputs they replace. To the extent
that this is true it is probably possible for
existing fellow team members to recognize
the shirking. But, by definition, the detection
of shirking by observing team output
is costly for team production. Secondly, assume
the presence of detection costs, and
assume that in order to secure a place on
the team a new input owner must accept
a smaller share of rewards (or a promise to
produce more). Then his incentive to shirk
would still be at least as great as the incentives
of the inputs replaced, because he
still bears less than the entire reduction in
team output for which he is responsible.