Endogenous organizational restructuring: status, productivity, & meritocratic dynamics

We model the dynamics of endogenous organizational restructuring, where those being assigned positions in an organization can themselves lobby for who gets which position. Internal labor market changes depend on how much individuals value their own status in the organization, the organizational output, their friends' welfare, and the quality of their own departmental colleagues. Meritocratic assignments are reached with probability one when agents value organizational output even with epsilon weight, provided friend networks and departments are not too large. We also characterize the effects of various voting rules, agendas, and specializations on the paths and the stability of organizational structures.