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Scapegoats and Transparency in Organizations

Author

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  • Segendorff, Björn

    (Dept. of Economics, Stockholm School of Economics)

Abstract

A separating equilibrium in which competent (incompetent) leaders choose competent (incompetent) co-workers is investigated. An outside observer rewards the leader at good policy outcomes. The incompetent co-worker can, at bad outcomes, be used as scapegoat. By assumption, the leader may fail in blaming the scapegoat. Two different assumptions on the outside observer's information set are compared. If she cannot observe a failed attempt, the separating equilibrium exists only if two non-mimicking constraints are met. If she can observe a failed attempt, an additional constraint is added due to the possibility of partial mimicking.

Suggested Citation

  • Segendorff, Björn, 2000. "Scapegoats and Transparency in Organizations," SSE/EFI Working Paper Series in Economics and Finance 407, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0407
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    References listed on IDEAS

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    More about this item

    Keywords

    Separating equilibrium; competence; transparency; co-worker; blame;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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