Title: Information and Governance in Organizations
- April Franco, Professor, University of Toronto Scarborough
- Marta Troya-Martinez, Assistant Professor, New Economic School
- Milo Bianchi, Professor, University of Toulouse 1 Capitole - TSE
- Daniel Ershov, Assistant Professor, University of Toulouse 1 Capitole – TSE
In all organizations, a central question is who should be in charge of decision-making. As the literature in organizational economics has shown, this question is tightly related to the management of the information needed to make decisions: who access it, how costly it is to transfer it, and the likelihood that it gets distorted in the process of communication. Costs and distortions depend on exogenous factors, like cognitive abilities, and endogenous decisions, which depend on the incentive structure.
In this thesis, I study the organizations’ choice of who should take decisions, and how language factors may impact this choice.
Chapter 1 studies how allocating authority over decision-making can be an incentive device per se. It exploits data from Stack Exchange, an online community for questions and answers, and estimates via a dynamic discrete choice model how much effort choices depend on the degree of authority that users have in the community. The structural model is used to simulate counterfactual contribution patterns under systems that allocate authority differently. The paper finds that authority has a positive value and that delegation based on performance incentivizes contributions.
Chapter 2 studies how the exogenous cost of language may affect communication effort and provides insights on the trade-off that knowledge platforms face when deciding to implement or not their website in multiple languages. It finds that users put more effort if they can write in their language, and the effect increases in the degree they are incentivized and in the questioner’s effort.
Chapter 3 investigates the relationship between hierarchies and communication flows. Using a unique dataset of 1557 employees of the Enron corporation, for whom emails data is matched to hierarchical positions, it finds that workers in higher positions of the hierarchy use larger vocabularies and broader languages, but more specialized messages. Results support the hypothesis that higher-ranked employees adopt, in the communication network, a role of intermediation between specialized divisions, while lower-ranked employees may be the collectors of information.