A BEJTE Topics article.

Abstract

This paper shows that favoritism can arise endogenously as an optimal decision rule in a symmetric model with an ex-ante impartial principal. Furthermore, favoritism dominates fairness specifically when the favorite promotes his own idea and ignores the other's idea so that the non-favorite loses motivation. Our model also provides new insights on hierarchical communication structure and group authority.

Submitted: November 7, 2005 · Accepted: July 26, 2006 · Published: August 11, 2006

Originally published in Topics in Theoretical Economics.

Recommended Citation

Kwon, Illoong (2006) "Endogenous Favoritism in Organizations," Topics in Theoretical Economics: Vol. 6 : Iss. 1, Article 10.
Available at: http://www.bepress.com/bejte/topics/vol6/iss1/art10