How Bureaucracy Allocates Decision Authority
Bureaucracy remains one of the most enduring forms of coordination. Understanding how decision rights are structured within bureaucracies helps explain both their resilience and their shortcomings.
Necessary Conditions for a Reputation Mechanism
To establish a formal reputation mechanism in a group, six conditions must be met: observable actions, information transmission, information persistence, repeat interaction or interdependence, shared evaluation criteria, and consequences based on reputation.
Reputation Mechanisms: Information-Rich vs Information-Poor Transactions
Reputation mechanisms for information-rich transactions should prioritize interpretation and context, while those for information-poor transactions must emphasize completeness and trust signals.
Reputation Mechanisms: Asset-Specific vs. Generic Transactions
Reputation mechanisms for asset-specific transactions must prioritize long-term reliability and relationship signaling, while those for generic transactions can focus on short-term performance metrics and broad comparability.
Reputation Mechanisms: Spot vs. Repeated Transactions
Reputation mechanisms for spot transactions must focus on immediate trust cues, while mechanisms for repeated transactions should emphasize long-term behavioral consistency and relationship building.
Reputation Mechanisms: Market vs. Non-Market Transactions
Market transactions are structured by price and competition; non-market transactions rely on norms, roles, and relationships—so reputation must serve different goals in each.
Reputation Mechanisms: Key Design Decisions
When designing a reputation mechanism, what are the basic questions to consider?
Transparency: What Influences It, And What It Influences In Turn
How is transparency defined across different research disciplines? What influences level of transparency and, in turn, what does the level of transparency influence?
Transparency: When Is More Better?
What properties should a decision process have, to justify full transparency of all decision information?
Transparency: Is Less Always Worse?
Transparency can help trust and accountability. However, it comes with risks. What are the pros and cons of increasing transparency through decision governance?
How To Measure The Quality of Decision Governance?
Governance has a cost, so we need to know and measure its benefits. This text adapts adapts ideas from the measurement of quality of political governance to decision governance in a firm.
How & Why Does Decision Governance Change?
This text outlines and illustrates eight mechanisms of governance change.
Promises: Using Promises To Evaluate Agent Reputation – Part 3
We explore what happens if the higher reputation increases an agent’s probability to fulfill its promises.
Promises: Using Promises To Evaluate Agent Reputation – Part 2
What if fulfilling a promise increases an agent’s reputation? The framework in this text captures this idea.
Promises: Using Promises To Evaluate Agent Reputation – Part 1
The text presents a framework in which reputation is a function of promises between agents. The framework can be used to create a reputation mechanism to use in decision processes, in multi agent systems, and so on.
Promises: On Relationships Between Promises And Decisions
How is the common sense concept of promise related to decision making behavior in economics?
Reputation: Which Social Factors Influence It, And How
In a group, which factors influence the group’s perception of a decision maker’s reputation? How is that perception formed?
Reputation: Which Psychological Factors Influence It, And How
Which psychological factors influence the perceived motivation of a decision maker, why, and how?
Reputation: Consequences of High And Low Reputation on Decision Making
Reputation is generally defined as the collective perceptions, evaluations, and beliefs that a social group holds about an individual, organization, or entity. How is decision making different if the decision maker has high or low reputation?
How To Enforce A Commitment?
Commitment mechanisms are strategies, agreements, or institutional arrangements deliberately established to ensure adherence to decisions made at an earlier time. How to design them?
Preferences: Why & How To Destabilize Preferences
When is it valuable to destabilize preferences? How can decision governance be used to do it?
Preferences: Why & How To Keep Preferences Stable
When is it valuable for the decision maker to have stable preferences? Which factors can destabilize preferences? How can preferences be stabilized through decision governance?
Values → Preferences: How Values Shape Preferences
An individual’s values, among other factors, influence the preferences that they will have over options in a decision situation. How?
Values: What Are Value Conflicts In Decision Making?
Unlike technical trade-offs, value conflicts involve deeply held beliefs that resist simple calculation. What is a value conflict? And how can a decision-maker know that they are facing a value conflict?
Values: How They Form and Change
Several psychological and sociological mechanisms have been proposed to explain the formation and change of values in individuals. What variables and relationships do these mechanisms highlight?
Values: How Values Influence Mood, Attitude, and Emotions in Decision Making
Values influence moods, attitudes, and emotions in decision-making. Why and how does this occur?
Expectations: How They Form If Decision Makers Are Distant
How public expectations form is interesting for decision governance because they concern decision situations in which there is considerable distance between stakeholders and decision makers. How do expectations form about distant decision makers?
Values: General And Stable Guides For Decision Making
Values influence attitudes, behaviors, and decision-making processes by providing a sense of what is important. How does this influence decision making?
Expectations: How Do Expectations About Others Form?
When we are in a decision situation with others, we form expectations about their behaviour, which becomes an input to our own subsequent decisions and interactions with them. How do these expectations form?
Expectations: Different Definitions, Always About the Future
If we want to influence the expectations someone forms in a decision situation, we need to start with an understanding of what an expectation may be.
Competence → Authority: More Is Usually More
Competence plays a significant role in shaping authority and influence in group decision-making. Individuals perceived as competent often hold greater decision-making power, influence group consensus, and guide the strategic direction of collective choices. Why is this common?
Attitude: Role in Decision Making and Relationship to Emotion and Mood
Attitude is a stable, learned predisposition to respond favorably or unfavorably toward an object, person, or situation. How does attitude influence decision making?
Competence: Why And How Decision Quality Depends on Competence
The ability to make effective decisions is closely linked to an individual’s expertise, cognitive abilities, and confidence in their knowledge. Why and how is this the case?
When To Delegate Decision Authority?
One of the questions when designing decision governance is whether to motivate an individual with authority to delegate it to someone else. Why would they do it?
Attention → Emotion: How Attention Mediates Emotions in Decision Making
If we design a decision situation or process in a way which influences attention, then we will also, indirectly influence emotions of people involved in that decision. If we take their perspective instead, they can, by controlling their attention, influence their emotions. Why and how?
Emotion → Attention: The Influence of Emotions on Attention in Decision Making
Mechanisms that explain how emotions influence attention in decision making suggest that when we design decision governance, it needs to stimulate positive emotions during decision making.
Emotion ⇄ Mood: How They Interact and Why This Is Important for Decision Governance
To influence how you and others make decisions, it is useful to understand how mood and emotions interact. This text summarizes mechanisms which were proposed to explain that interaction and its influence on decision making behavior.
Attention → Memory: How Attention Influences Memory in Decision-Making
Attention influences what information is processed and retained in a decision situation, and consequently how memory changes through decision making. This text outlines main mechanisms used to explain this dynamic.
Memory → Attention: How Memory Shapes Attention in Decision Making
Memory influences attention and consequently how decision-makers prioritize information, evaluate options, and sustain focus. Decision governance can be designed to influence variables in these mechanisms, which makes it useful to know about them.
Goal Displacement: What It Is And How To Mitigate It
Goal displacement refers to a situation where an individual, group, or organization shifts its focus from the intended objectives to secondary or substitute goals. Which factors increase, and which decrease the probability of goal displacement?
Crowding-In Effect: The Right Incentives Amplify the Right Motives
On how to amplify the decision-maker’s intrinsic motivation to make good decisions.
Crowding-Out Effect: The Wrong Incentives Erode the Right Motives
On how not to deteriorate the decision-maker’s intrinsic motivation to make good decisions.
Incentives: Negative Consequences of Incentive Mechanisms
Let’s assume that decision governance in a firm includes an incentive mechanism which is designed to financially reward decision makers in proportion to the number of options they consider in a decision situation. What could go wrong?
Social Learning: How to Use It to Accelerate Adoption of Decision Governance
Let’s say that a new decision process for capital allocation needs to be introduced in a firm. Based on factors which accelerate social learning, what can be done to accelerate the adoption of the new process?
Social Learning: How to Accelerate It
Social learning accelerates under conditions where respected models demonstrate behaviors, reinforcement and repetition increase exposure, observability clarifies benefits, similarity between the observer and model exists, perceived risk is low, and benefits are high.
Social Learning: Impact on Decision Making Behavior
Social learning is the notion that individuals acquire beliefs, attitudes, and behaviors through observing and interacting with others. How can social learning influence a decision maker’s behavior?
Power: How Can Low Power Decision Makers Be Credible?
An important question that power, as control of resources, raises for decision governance is this: How to make sure that specific decision governance is credible when specific individuals whom it assigns roles have different levels of power (occupy different levels in a power hierarchy)?
Power: What If High Decision Authority Is Combined With Low Power
What if decision authority is assigned against the power hierarchy? That is, what if individuals who have more power are given lower decision rights through decision governance?
Power: Stability and Destabilization of Legitimacy
Understanding the factors that stabilize or destabilize various sources of power legitimacy can provide valuable insights into how institutions maintain authority and when they risk losing it.
Power: Sources of Legitimacy and Implications for Decision Authority
The legitimacy of power refers to the justification and acceptance of authority by those subject to it. What can be the sources of legitimacy of a decision maker’s power, and how is this related to decision processes and decision outcomes?