Disobedience and Authority

Anthony Marino, John Matsusaka and Jan Zabojnik

No 273585, Queen's Economics Department Working Papers from Queen's University - Department of Economics

Abstract: This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent’s ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no better information than the principal. The allocation of authority thus depends on external market conditions as well as the information and agency problems emphasized in the literature. Evidence from a national survey of organizations shows that worker autonomy is related to separation costs as the theory predicts.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 54
Date: 2006-11
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Working Paper: Disobedience And Authority (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:quedwp:273585

DOI: 10.22004/ag.econ.273585

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