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On the Notion of Responsibility in Organizations

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Author Info
Sliwka, Dirk () (University of Cologne and IZA Bonn)

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Abstract

We derive a natural definition of responsibility in a formal model where employees care for their career prospects: A superior holds a subordinate responsible for a task, when she announces her beliefs 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 then is affected by the outcome of the task and he therefore has strong incentives to contribute to its success. There are equilibria where either a single agent or no agent is responsible for a task but joint responsibility never arises. Several extensions are discussed.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1423.

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Length: 37 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1423

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Related research
Keywords: responsibility; career concern; reputation; delegation; incentives;

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Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation

This paper has been announced in the following NEP Reports:

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)
    Other versions:
  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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Cited by:
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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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