A Signalling Theory of Scapegoats

Björn Segendorff
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Björn Segendorff: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

No 406, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: This study investigates under what circumstances there exist a separating equilibrium in which competent leaders choose incompetent co-workers and incompetent leaders choose competent co-workers. The driving force for the competent leader is the insurance motive; if things go wrong he can blame the incompetent co-worker and remain his reputation of being competent. For the incompetent leader the expected gain from such an insurance is outweighed by its costs in terms of lower expected policy outcome. Co-workers are motivated by career opportunities allowing for conflicting interests between the leader and the co-worker.

Keywords: Separating equilibrium; competence; co-worker; blame; scapegoat (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 J33 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2000-05-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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