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Title:A signalling theory of scapegoats PDF Logo
Authors:Segendorff, Björn
Issue Date:2000
Series/Report no.:SSE/EFI Working Paper Series in Economics and Finance 406
Abstract:This study investigates under what circumstances there exist a separating equilibrium in which competent leaders choose incompetent co-workers and incompetent leaders choose competent co-workers. The driving force for the competent leader is the insurance motive; if things go wrong he can blame the incompetent co-worker and remain his reputation of being competent. For the incompetent leader the expected gain from such an insurance is outweighed by its costs in terms of lower expected policy outcome. Co-workers are motivated by career opportunities allowing for conflicting interests between the leader and the co-worker.
Subjects:Separating equilibrium
competence
co-worker
blame
scapegoat
JEL:C72
D72
D82
J33
Document Type:Working Paper
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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