A Theory of Organizational Dynamics: Internal Politics and Efficiency

Hongbin Cai, Hong Feng and Xi Weng

American Economic Journal: Microeconomics, 2018, vol. 10, issue 4, 94-130

Abstract: We consider a three-member organization in which one member retires in each period and the incumbent members vote to admit a candidate to fill the vacancy. Candidates differ in quality and belong to one of two types, and majority-type members share the total rent of that period. We characterize the symmetric Markov equilibria with undominated strategies and compare the long-term welfare among them. Unanimity voting is better than majority voting at promoting long-term welfare. In addition, organizations with a certain degree of incongruity perform better in the long run than either harmonious or very divided organizations.

JEL-codes: D23 D71 D72 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mic.20160237
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mic.20160237 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... 5985oK1fRo55wVdwuBit (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... T0gl9_wLyALxu2p--1xQ (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmic:v:10:y:2018:i:4:p:94-130

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().