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Mediating Internal Competition for Resources

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  • Suraj Prasad
  • Yasunari Tamada

Abstract

We consider a model of internal competition, where projects developed by agents with different preferences compete for resources in an organization. Allowing a manager—who has moderate preferences—to control the allocation of resources has benefits when preferences are not too diverse. In particular, the manager acts as a mediator, forcing agents to compromise when competing projects succeed, thus providing better insurance to agents and increasing their effort. Our framework provides a theoretical foundation for two influential views of a manager—as the “visible hand” that allocates resources, and as a “power broker” who resolves conflict in an organization.

Suggested Citation

  • Suraj Prasad & Yasunari Tamada, 2024. "Mediating Internal Competition for Resources," Journal of Industrial Economics, Wiley Blackwell, vol. 72(1), pages 157-192, March.
    • Handle: RePEc:bla:jindec:v:72:y:2024:i:1:p:157-192
    DOI: 10.1111/joie.12353
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