The paper demonstrates an effective team ranking mechanism in organizations based on connectivity and supervisor conditions.
A principal wants to rank and reward teams in an organization. Agents perfectly observe the local ranking of their teams, and strictly prefer being on higher-ranking teams. I show there exists an ex-post incentive compatible and efficient team ranking mechanism if (i) there is an agent who belongs to every team (supervisor condition), or (ii) whenever two teams share an agent in common, they share at least two agents in common (connectivity condition). I identify a class of organizations for which these conditions are both necessary and sufficient. In the special case where the principal wants to rank every group of co-workers in the organization, there exists a team ranking mechanism if and only if the organizational network is a star.
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Adam Hamdan (2026) studied this question.
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