Relinquishing Power, Exploitation and Political Unemployment in Democratic Organizations

This paper focus on the dynamics of organizations. Agents are grouped into three classes, high, medium and low productivity. We analyze the evolution of organizations which take decisions on whom to hire and how to share the output by plurality voting. We study the evolution of political power and show that in some cases, rational agents who value the future may yield political power to another class. This is what we call the relinquish effect. We show that high productivity agents may receive less than their individual output, i.e. exploitation is possible. We also show that high productivity agents may be left out in the cold because their entrance in an organization may threaten the dominance of other classes. We call this political unemployment