On the Role of Incentives in Evolutionary Approaches to Organizational Design

Stephan Leitner

Papers from arXiv.org

Abstract: This paper introduces a model of a stylized organization that is comprised of several departments that autonomously allocate tasks. To do so, the departments either take short-sighted decisions that immediately maximize their utility or take long-sighted decisions that aim at minimizing the interdependencies between tasks. The organization guides the departments' behavior by either an individualistic, a balanced, or an altruistic linear incentive scheme. Even if tasks are perfectly decomposable, altruistic incentive schemes are preferred over individualistic incentive schemes since they substantially increase the organization's performance. Interestingly, if altruistic incentive schemes are effective, short-sighted decisions appear favorable since they do not only increase performance in the short run but also result in significantly higher performances in the long run.

Date: 2021-05, Revised 2021-05
New Economics Papers: this item is included in nep-evo and nep-upt
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Citations: View citations in EconPapers (3)

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