A Theory of Appeasement: Naïve Organization

Soumyarup Saha, Swapnendu Banerjee and Arindam Paul

MPRA Paper from University Library of Munich, Germany

Abstract: We explore the optimal choice of a low-ability principal while recruiting between high-ability and low-ability agents for a particular position in an organization. The organization is naïve in the sense that it fails to shut the door to malpractice possibilities in recruitment. The agents engage in a tournament of appeasing the principal in order to get favoured prior to the recruitment process. The principal being low-ability suffers from inferiority complex vis-à-vis the high-ability (identifies with the low-ability agent) and enjoys the appeasement of the low-ability agent more vis-à-vis the high-ability. We find conditions under which the low-ability will appease more compared to the high ability. We also explore conditions under which the principal will recruit the low-ability agent, thus jeopardizing the organizational welfare.

Keywords: Appeasement; Recruitment; Hidden Action; High-ability; Low-ability (search for similar items in EconPapers)
JEL-codes: D82 D86 J41 (search for similar items in EconPapers)
Date: 2026-04-05
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