We consider a leader and a subordinate he appoints who engage in team production. The public observes the organization's performance, but is unable to determine the separate contributions of the leader and of the subordinate. The leader may therefore claim credit for the good work of his...

We consider a leader and a subordinate he appoints who engage in team production. The public observes the organization's performance, but is unable to determine the separate contributions of the leader and of the subordinate. The leader may therefore claim credit for the good work of his...

This paper examines optimal decision making under three different organizational forms: committees, hierarchies and polyarchies. Our focus is on the trade-off between errors of rejecting good projects versus errors of accepting bad projects, and on the trade-off between gains from more extensive...

Moore & Shannon's theorem is the cornerstone in reliability theory, but cannot be applied to human systems in its original form. A generalization to human systems would therefore be of considerable interest because the choice of organization structure can remedy reliability problems that...

In many organizations, decisions are taken by unanimity giving each member veto power. We analyze a model of an organization in which members with heterogenous productivity privately contribute to a common good. Under unanimity, the least efficient member imposes her preferred effort choice on...