We investigate the optimal shape of organizations to reduce embezzlement. In a stylized synthesis of a common pool resource and ultimatum game, agents move sequentially along an organizational architecture, can take a share of the available resources, and can choose to "blow the whistle", an...

Following Garicano (2000), we consider groups whose members decide what knowledge to acquire and how to use this knowledge in production. If efficient production requires common knowledge, all group members should become workers and acquire common knowledge. But if efficient production requires...