Collective action in organizational structures

Abstract

Public goods games played by a group of individuals collectively performing actions towards a common interest characterize social dilemmas where both competition and cooperation are present. By using agent-based simulation, this paper investigates how collective action in the form of repeated n-person linear public goods games is affected when the interaction of individuals is driven by the underlying hierarchical structure of an organization. The proposed agent-based simulation model is based on generally known empirical findings about public goods games and takes into account that individuals may change their profiles from conditional cooperators to rational egoists or vice versa. To do so, a fuzzy logic system was designed to allow the cumulative modification of agents’ profiles in the presence of vague variables such as individuals’ attitude towards group pressure and/or their perception about the cooperation of others. From the simulation results, it can be concluded that collective action is affected by the structural characteristics of hierarchical organizations. The major findings are as follows: (1) Cooperation in organizational structures is fostered when there is a collegial model defining the structure of the punishment mechanisms employed by organizations. (2) Having multiple, and small organizational units fosters group pressure and highlights the positive perception about the cooperation of others, resulting in organizations achieving relatively high aggregate contribution levels. (3) The greater the number of levels, the higher the aggregate contribution level of an organization when effective sanctioning systems are introduced.