Heikki Rantakari
USC, Marshall School of Business



(Tuesday, 20th May 2014)

Title : Decision-making Structures and Incentives

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The past few decades have witnessed a rapid expansion in our understanding of how monetary compensation can be used to influence productive effort. What remains less thoroughly understood, however, is how other aspects of the organizational structure, such as the allocation of decision rights or other elements of the decision-making process, influence the behavior of organizational members, not only in terms of their productive effort, but also in terms of their willingness to share information, to make good decisions, and to finally implement the decisions made.

This workshop will provide an overview of some of the recent developments in this area of inquiry, examining how the decision-making structure affects information flows through strategic communication among the organizational members, and the members’ incentives to contribute to the decisions in the first place, both in terms of the effort they exert in generating information or alternatives for choice, and the types of activities they will engage in. For example, we will examine how an appropriate decision process may harness the conflict among the organizational members to generate efficient equilibrium compromise, and when it may be optimal to consistently favor some organizational members in the decision-making process.

Bibliographical references :

Must read reference : Rantakari, H. (2014), "Conflict Resolution and Organizational Influence," working paper, USC Marshall

Bonatti, A. and Rantakari, H. (2014), "Politics of Compromise," working paper, MIT Sloan and USC Marshall

Rantakari, H. (2012), "Employee Initiative and Managerial Control," American Economic Journal: Microeconomics, 4(3), 171-211

Additional references