You and a partner are employed on a joint project.  The probability of success depends on your joint effort and, if the project succeeds, you both get a payoff of one.  Effort is costly.  This scenario is loosely based on Holmstom’s classic Moral Hazard in Teams model.  In one version of this model there is a free-rider problem.

That’s the case where you and your partner agree that both your costly efforts contribute to the success of the project.  The harder you work, the more likely success is for you but also the more likely is success for your partner.  You do not take the positive externality into account in your effort choice and exert too little effort from the perspective of your partnership.  This is the free-rider problem.  If somehow either you or your partner could be inspirational and motivate both of you to work for the “common good”, the team would get closer to the joint surplus maximizing solution and everyone would be better off.  The partners share a common “vision” but have to be motivated to work towards it.

But there is another scenario.  In this one, you and your partner disagree about the direction in which the organization should be going.  You think his costly effort reduces the probability of success.  He thinks the same about your effort.  Your effort exerts a negative externality on your partner and vice-versa.  Each player does not take this into account and exerts too much effort from the perspective of the partnership.  In fact if both players exerted no effort what so ever, they would both be better off according to each of their payoff functions.  There is no jointly shared vision in this organization.

Actually, if you are in this latter situation, doing nothing is doing good.  Your costly effort is bad for both of you and it is selfish of you to work.  So, slack off and go to the beach.  You will be taking one for the team.