In a repeated interaction between a principal and two agents with inter-agents externalities and asymmetric information, we show that optimal decentralization within the organization is limited to the first period and across agents.

Social assimilation has been observed in many societies where members of the minority group suffer from discrimination. In this note, we provide a simple economic model of assimilation and show that the adoption of the social behavior of the dominant group can be used as a signal by high...