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Disobedience and Authority

53 Pages Posted: 14 Jul 2006  

John G. Matsusaka

University of Southern California - Marshall School of Business; USC Gould School of Law

Anthony M. Marino

University of Southern California - Marshall School of Business

Jan Zabojnik

Queen's University - Department of Economics

Date Written: June 2006

Abstract

This paper presents a theory of the allocation of authority in an organization in which centralization is limited by the agent's ability to disobey the principal. We show that workers are given more authority when they are costly to replace or do not mind looking for another job, even if they have no better information than the principal. The allocation of authority thus depends on external market conditions as well as the information and agency problems emphasized in the literature. Evidence from a national survey of organizations shows that worker autonomy is related to separation costs as the theory predicts.

Keywords: authority, delegation, incentives

JEL Classification: M50, D23, L22

Suggested Citation

Matsusaka, John G. and Marino, Anthony M. and Zabojnik, Jan, Disobedience and Authority (June 2006). USC CLEO Research Paper No. C06-11. Available at SSRN: https://ssrn.com/abstract=914106 or http://dx.doi.org/10.2139/ssrn.914106

John Matsusaka (Contact Author)

University of Southern California - Marshall School of Business ( email )

Department of Finance & Business Economics
Los Angeles, CA 90089
United States
213-740-6495 (Phone)
213-740-6650 (Fax)

USC Gould School of Law

699 Exposition Boulevard
Los Angeles, CA 90089
United States
213-740-6495 (Phone)

Anthony Marino

University of Southern California - Marshall School of Business ( email )

Dept. of Finance & Business Economics
Los Angeles, CA 90089
United States
213-740-6525 (Phone)
213-740-6650 (Fax)

Jan Zabojnik

Queen's University - Department of Economics ( email )

94 University Avenue
Kingston, Ontario K7L 3N6
Canada
613-533-2275 (Phone)
613-533-6668 (Fax)

HOME PAGE: http://qed.econ.queensu.ca/faculty/zabojnik/Page/

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