Relinquishing power, exploitation and political unemployment in democratic organizations

Abstract

We analyze the evolution of organizations which take decisions on whom to hire and how to share the output by plurality voting. Agents are grouped in three classes, high, medium and low productivity. We study the evolution of political power and show that in some cases, rational agents who value the future may yield political power to another class. This is what we call the relinquish effect. We show that high productivity agents may receive less than their individual output, i.e. exploitation is possible. We also show that high productivity agents may be left out in the cold because their entrance in an organization may threaten the dominance of other classes. We call this political unemployment. ; Thanks to the MOMA network under the Project ECO2014-57673-REDT for financial support. The first author acknowledges financial support from ECO2014 53051, SGR2014-515 and PROMETEO/2013/037. Luis Corchon and Antonio Romero-Medina acknowledge financial support from MEC under Project ECO2014_57442_P, and financial support from the Ministerio Economía y Competitividad (Spain), Grants MYGRANT and MDM 2014-0431.