Self-recognition in teams (Q2280047)

The authors introduce and study the ``null self-recognition'' idea, which occurs when a player who was certain that they were a particular type, privately discovers that they are in fact some other type. To address questions as to how players update their beliefs regarding their partner's type, and beliefs regarding both players' types after self-recognition, they propose a ``sequential reassessment'' rule, in which beliefs concerning each player's type are modified up to a given order. As an initial investigation of its equilibrium consequences, they embed sequential reassessment in a simple model of team production, in which players experience self-recognition when game play begins. The main result, which applies for team projects with uneven task demands, shows how a player's decision to work or avoid can depend solely on whether that player's reassessment of their own type is ``deeper'' or ``shallower'' than their reassessment of their partner's type.