The agent-based approach views an organization as a collection of agents, interacting with one another in their pursuit of assigned tasks. The performance of an organization in this framework is determined by the formal and informal structures of interactions among agents, which define the lines...

A hierarchically structured rent-seeking contest may be associated with lower equilibrium expenditure than a corresponding flat contest. In this chapter we discuss how this fact may be used to explain the structure of organizations such as firms, including why firms commonly have outside owners.

We investigate overlapping contests in multi-divisional organizations in which an individual's effort simultaneously determines the outcome of several contests on different hierarchical levels. We show that individuals in smaller units are advantaged in the grand (organization-wide) contest for...

We consider a bandit problem faced by a team of two heterogeneous players. The team is hierarchical in that one (the principal) retains the exclusive right to terminate the project while the other (the agent) focuses strictly on implementing the project assigned to him. As a key departure, we...