Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/155623 
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper No. 6381
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We model leadership selection, competition, and decision making in teams with heterogeneous membership composition. We show that if the choice of leadership in a team is imprecise or noisy—which may arguably be the case if appointment decisions are made by non-expert administrators—then it is not necessarily the case that the best individuals should be selected as team members. On the contrary, and in line with what has been called the “Apollo effect,” a “dream team” consisting of unambiguously higher performing individuals may perform worse in terms of team output than a group composed of lower performers. We characterize the properties of the leadership selection and production processes which lead to the Apollo effect and clarify when the opposite effect occurs in which supertalent performs better than comparatively less qualified groups.
Subjects: 
team composition
leadership
mistakes
JEL: 
C70
D70
J80
Document Type: 
Working Paper
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