Interactions across multiple games: cooperation, corruption, and organizational design

Abstract

Teamwork is vital in many settings, and it is socially beneficial for teams to cooperate in some situations ("good games") and not in others ("bad games;" e.g., those that allow for corruption). A team's cooperation in any given game depends on expectations of cooperation in future iterations of both good and bad games. We identify when sustaining cooperation on good games necessitates cooperation on bad games. We then characterize how a designer should optimally assign workers to teams and teams to tasks that involve varying arrival rates of good and bad games. Our results show how organizational design can be used to promote cooperation while minimizing corruption. 

Keywords: Teams, Organizational Design, Cooperation, Corruption, Police, Bureaucracy, Stochastic Games

JEL Classification: C73, D23, D73, L20