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On the Notion of Responsibility in Organizations

  • Dirk Sliwka

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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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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  1. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
  2. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  3. 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.
  4. Jerry R. Green & Nancy L. Stokey, 1982. "A Comparison of Tournaments and Contracts," NBER Working Papers 0840, National Bureau of Economic Research, Inc.
  5. Meyers, Margaret A, 1994. "The Dynamics of Learning with Team Production: Implications for Task Assignment," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 1157-84, November.
  6. Michael Waldman, 1989. "Up-or-Out Contracts: A Signaling Perspective," UCLA Economics Working Papers 556, UCLA Department of Economics.
  7. 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.
  8. 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.
  9. Manove, Michael, 1997. "Job Responsibility, Pay and Promotion," Economic Journal, Royal Economic Society, vol. 107(440), pages 85-103, January.
  10. Mathias Dewatripont & Ian Jewitt & Jean Tirole, 1999. "The economics of career concerns: part 1 :comparing information structures," ULB Institutional Repository 2013/9617, ULB -- Universite Libre de Bruxelles.
  11. 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.
  12. 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.
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