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On the Notion of Responsibility in Organizations

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Author Info
Dirk Sliwka

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Abstract

We derive a natural definition of responsibility in a formal model in which employees care for their career prospects: A superior holds a subordinate responsible for a task when she announces her belief that this subordinate contributes most to this task. We show that those announced beliefs lead to a self-fulfilling prophecy, as the reputation of the responsible subordinate is then affected by the outcome of the task and he therefore has strong incentives to contribute to its success. There are equilibria in which either a single agent or no agent is responsible for a task but joint responsibility never arises. Several extensions are discussed. Copyright 2006, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/jleo/ewj012
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Publisher Info
Article provided by Oxford University Press in its journal The Journal of Law, Economics, and Organization.

Volume (Year): 22 (2006)
Issue (Month): 2 (October)
Pages: 523-547
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Handle: RePEc:oup:jleorg:v:22:y:2006:i:2:p:523-547

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Edward P. Lazear & Sherwin Rosen, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Barry J. Nalebuff & Joseph E. Stiglitz, 1983. "Prices and Incentives: Towards a General Theory of Compensation and Competition," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 21-43, Spring. [Downloadable!] (restricted)
  3. Baker, George & Gibbons, Robert & Murphy, Kevin J, 1999. "Informal Authority in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 56-73, April.
  4. Fairburn, James A. & Malcomson, James M., 1994. "Rewarding performance by promotion to a different job," European Economic Review, Elsevier, vol. 38(3-4), pages 683-690, April. [Downloadable!] (restricted)
  5. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer. [Downloadable!] (restricted)
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  6. Meyer, M.A., 1991. "The Dynamics of Learning with Team Production: Implications for Task Assignment," Papers 30, Stanford - Institute for Thoretical Economics.
  7. Prendergast, Canice J, 1995. "A Theory of Responsibility in Organizations," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 387-400, July. [Downloadable!] (restricted)
  8. Dewatripont, Mathias & Jewitt, Ian & Tirole, Jean, 1999. "The Economics of Career Concerns, Part I: Comparing Information Structures," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 183-98, January. [Downloadable!] (restricted)
  9. Manove, Michael, 1997. "Job Responsibility, Pay and Promotion," Economic Journal, Royal Economic Society, vol. 107(440), pages 85-103, January. [Downloadable!] (restricted)
  10. Green, Jerry R & Stokey, Nancy L, 1983. "A Comparison of Tournaments and Contracts," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 349-64, June. [Downloadable!] (restricted)
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  11. Dirk Sliwka, 2001. "On the Costs and Benefits of Delegation in Organizations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(4), pages 568-, December.
  12. James Malcomson & James Fairburn, 2000. "Performance, Promotion, and the Peter Principle," Economics Series Working Papers 026, University of Oxford, Department of Economics.
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  13. Waldman, Michael, 1990. "Up-or-Out Contracts: A Signaling Perspective," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 230-50, April. [Downloadable!] (restricted)
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  14. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June. [Downloadable!] (restricted)
  15. Bhattacharya, Sudipto & Guasch, J Luis, 1988. "Heterogeneity, Tournaments, and Hierarchies," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 867-81, August. [Downloadable!] (restricted)
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  1. Björn Bartling & Urs Fischbacher, 2008. "Shifting the Blame: On Delegation and Responsibility," IEW - Working Papers iewwp380, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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