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Interaction in organizations: A dynamic choice of codes

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  • Gomes, Orlando

Abstract

Individuals within a firm have to choose the way in which they develop the tasks that are assigned to them. In the model proposed in this paper, workers choose between two codes. They are rewarded according to their productivity and this depends on the selected code in two ways: first, the best understood code is likely to be the one chosen by the worker; second, it is important to select a code that others also use in order to accomplish team work benefits. A memory loss element is introduced, reflecting the presence of a myopic attitude in the choice process, and an intensity of choice component is also considered, making the selection of a code a process where bounded rationality prevails. Under the proposed setup, one identifies a steady state point, to which the system is likely to converge, and that reveals the long-term probability value of choosing one of the two codes.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 37 (2008)
Issue (Month): 4 (August)
Pages: 1570-1583

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Handle: RePEc:eee:soceco:v:37:y:2008:i:4:p:1570-1583

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Web page: http://www.elsevier.com/locate/inca/620175

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  1. Gaunersdorfer, A. & Hommes, C.H. & Wagener, F.O.O., 2003. "Bifurcation Routes to Volatility Clustering under Evolutionary Learning," CeNDEF Working Papers 03-03, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
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  12. Raghuram G. Rajan & Luigi Zingales, 2001. "The Firm As A Dedicated Hierarchy: A Theory Of The Origins And Growth Of Firms," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 805-851, August.
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  14. Durlauf, Steven N., 2004. "Neighborhood effects," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 50, pages 2173-2242 Elsevier.
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