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Unformatted text preview: PMP 10/6 Notes • Institutionalizing solutions to collective action dilemmas o Estab “rules of the game” o The delegation framework or princpl agent framewrk o Basic issue of team production • Orgs are institutional solutions to coll action probs • Coase o The firm replaces ‘invisible hand’ w/ manger o Firms are a hierarchy in which principls delegate to agnts • Cheung o River boat pullers and whipper Pullers are principal and whipper is agent Agent is given authority by principal Whipper is solution to free rider problem • Is incentive for pullers not to slack off Human behavior in collective settings • Need to overcome free-rider prob • Free-riding (aka shirking) • Cost of punishment must be higher than cost of work • We use term party whip: person to ensure that party votes collectively (acts as unit) • In joining org, ppl accept coercion o U give up some freedom of action o Ex-post coercion- accepting possibility of sanctions o Ex-anti consensual- choose to join group...
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This note was uploaded on 12/27/2009 for the course IRPS IRCO 400 taught by Professor Matthewshugart during the Fall '08 term at UCSD.
- Fall '08