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Power dynamics in organizations

Li, Jin, Matouschek, Niko and Powell, Michael (2017) Power dynamics in organizations. American Economic Journal: Microeconomics, 9 (1). pp. 217-241. ISSN 1945-7669

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Identification Number: 10.1257/mic.20150138


We examine an infinitely repeated game between a principal, who has the formal authority to decide on a project, and a biased agent, who is privately informed about what projects are available. The optimal relational contract speaks to how power is earned, lost, and retained. It shows that entrenched power structures are consistent with optimal administration of power. And it provides new perspectives on why similar firms organize differently, even when those organizational differences lead to persistent differences in performance, and why established firms fail to exploit new opportunities, even when they are publicly observable.

Item Type: Article
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Additional Information: © 2017 American Economic Association
Divisions: Management
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Date Deposited: 10 Oct 2017 16:24
Last Modified: 06 Jun 2024 01:09

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