Delegation and Team Selection in Organizations: An Experimental Study

Hamman, John; Martínez-Carrasco, Miguel A.

doi:10.2139/ssrn.3140704

Cited by 1 publication

(1 citation statement)

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“…A main question in the economics of organization literature is whether organizations are more efficient when they are centrally managed or when decentralization takes place and the various units within an organization function independently. This topic has been the subject of several recent experimental studies [see Evdokimov and Garfagnini 2019;Hamman and Martínez-Carrasco 2018;Brandts and Cooper 2018;Cooper et al (1989)] with the evidence being inconclusive and heavily dependent on the context. In our 'Leader' treatment, one subject was chosen (randomly by the software) to be the leader, and he or she could send messages to all the other members of the group, and they could send messages to him or her; but no other messages were allowed.…”

Section: Hypothesismentioning

confidence: 99%

Testing for the emergence of spontaneous order

Georgalos

Hey

2019

Exp Econ

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We report on an experimental investigation of the emergence of Spontaneous Order, the idea that societies can coordinate , without government intervention, on a form of society that is good for its citizens, as described by Adam Smith. Our experimental design is based on a production game with a convex input provision possibility frontier, where subjects have to choose a point on this frontier. We start with a simple society consisting of just two people, two inputs, one final good and in which the production process exhibits returns to specialisation. We then study more complex societies by increasing the size of the society (groups of 6 and 9 subjects) and the number of inputs (6 and 9 inputs respectively), as well as the combinations of inputs that each subject can provide. This form of production can be characterised as a cooperative game, where the Nash equilibrium predicts that the optimal outcome is achieved when each member of this society specialises in the provision of a single input. Based on this framework, we investigate whether Spontaneous Order can emerge, without it being imposed by the government. We find strong evidence in favour of the emergence of Spontaneous Order, with communication being an important factor. Using text classification algorithms (Multinomial Naive Bayes) we quantitatively analyse the available chat data and we provide insight into the kind of communication that fosters specialisation in the absence of external involvement. We note that, while communication has been shown to foster coordination in other contexts (for example, in public goods games, market entry games and competitive coordination games) this contribution is in the context of a production game where specialisation is crucial.

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Section: Hypothesismentioning

confidence: 99%