Sabotage in teams

We show that a team may favor self-sabotage to influence the principal's contract decision. Sabotage increases a team member's bonus and total team effort. If these benefits outweigh the reduction in the success probability, sabotaging the team is rational.

► We identify a novel explanation for sabotage in teams and self-handicapping. ► Self-sabotage increases the team's marginal productivity. ► In response, the principal implements higher monetary incentives for the team. ► The saboteur benefits from a larger individual bonus payment. ► Moreover, the saboteur benefits from higher efforts by his/her teammates.