Relinquishing Power, Exploitation and Political Unemployment in Democratic Organizations

24 Pages Posted: 20 Jan 2016 Last revised: 6 Aug 2016

See all articles by Carmen Bevia

Carmen Bevia

Universidad de Alicante

Luis C. Corchón

Universidad Carlos III de Madrid - Department of Economics

Antonio Romero-Medina

Universidad Carlos III de Madrid - Department of Economics

Date Written: July 26, 2016

Abstract

This paper focus on the dynamics of organizations. Agents are grouped into three classes, high, medium and low productivity. We analyze the evolution of organizations which take decisions on whom to hire and how to share the output by plurality voting. We study the evolution of political power and show that in some cases, rational agents who value the future may yield political power to another class. This is what we call the relinquish effect. We show that high productivity agents may receive less than their individual output, i.e. exploitation is possible. We also show that high productivity agents may be left out in the cold because their entrance in an organization may threaten the dominance of other classes. We call this political unemployment.

Keywords: dynamics, organizations

JEL Classification: C7, D7

Suggested Citation

Bevia, Carmen and Corchón Diaz, Luis Carlos and Romero-Medina, Antonio, Relinquishing Power, Exploitation and Political Unemployment in Democratic Organizations (July 26, 2016). Available at SSRN: https://ssrn.com/abstract=2718122 or http://dx.doi.org/10.2139/ssrn.2718122

Carmen Bevia

Universidad de Alicante ( email )

Campus de San Vicente, sn
Alicante, 03690
Spain

Luis Carlos Corchón Diaz (Contact Author)

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain

Antonio Romero-Medina

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126-128
Getafe, Madrid 28903
Spain

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