Economics of leadership and hierarchy

• 成果类型: Article
• 署名作者: Zhou, Junjie
• 署名单位: Shanghai University of Finance & Economics
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2015.12.012
• 发表日期: 2016
• 页码: 88-106
• 关键词: Organization design; hierarchy; leadership; free-riding; Dynamic signaling; Lead by example

摘要

This paper explores leadership within hierarchical organizations. For each hierarchy, I consider a dynamic signaling game in which each player observes only the actions of his direct superiors before choosing his action. At the top of the hierarchy are the leaders, who learn the state from nature. The hierarchy controls the flow of information and the timing of the game, and determines the equilibrium output and welfare. I show that the welfare-optimal hierarchy is the chain, because it maximizes the incentive of players to lead by example for their subordinates. The chain remains optimal even in the presence of verifiable or unverifiable costly information acquisition by the leaders. (C) 2016 Elsevier Inc. All rights reserved.