Economic Analysis On Crowding Out Tatlents In Orgnizations

Crowding talents out is a common phenomenon in organizations; however there are some profound economic contradictions hiding behind it. This paper reveals two economic contradictions concealed in this phenomenon. One is the contradiction between the employing principles of organizations and selfishness of people's nature, and the other is between the superior's behavior of crowding out the subordinates and the perfect rationality hypothesis. The previous studies have classified such behaviors as the psychology category, which are considered as the negative effects caused by envy. Few scholars analyze and explain this phenomenon with economic methods. This paper fills up the gap, in other words, the topic of this article itself is an innovation.First, in the introduction of this paper, we directly put forward the problem of crowding out talents, interpreting the theoretical background and the significance of the topic. Then, explaination and distinguishment of the major concepts are added in detail to avoid inclusion and intercross of different concepts so that the expression will be more precise and unambiguous. In the end, we briefly introduce the analysis methods and the structure arrangement of this paper.After that, we summarize and comment on the related previous studies based on the issues we've put forward before. This chapter is divided into four parts. First, we sum up the studies of the phenomenon in crowding out talents in psychology and hierarchiology, indicating the psychological and economic element of talents crowding ---'relative incompetent'. Second, briefly introduce the behavioral economics theory, mainly the Prospect Theory and'inequity aversion'. Third, shortly review the traditional principal - agent theory and its limitations. Last, study the selection of talents and the brain drain in Organizational Behavior and ManagementFollowed by the main body of this paper is the Economic Analysis toward the phenomenon of talents marginalized. Firstly, make some relevant assumptions and the proofs of individual assumptions. This paper discusses the actor in the principal-agent relationship, yet which is different from traditional principal-agent. In the cases of crowding talent out, the parties involved are imbalanced concerning the status and power, as the incumbent leaders have more choices than their direct subordinates who are often in a passive position; thus it is the reason that why this exclusion is usually a one-way jealous behavior. Being an independent subject in the relations of hierarchy position, the superior actor compares all kinds of behavioral strategies in order to choose the strategic behaviors which have the greatest expected utility for him. In the beginning, the paper makes use of the subjective expected utility theory to explain the actor's strategic options, and compares the actor's choices under two different salary systems, one is the fixed salaries and the other is the pay related to the achievement the actor obtains. In the further discussion, the paper combines the fairness preferences in the behavioral economics theory to improve the previous model, makes the decision-making analysis of the actor no longer lack psychological basis, and organically integrates cognitive psychology theory, so that we can better explain the personnel exclusion.Then, on the basis of analyzing the economic models, we explicitly explain the factors that affect the behavior of talents crowding out and put forward relevant proposals. Finally, there is a brief summary about achievements of the whole thesis, indicating the limitations of the study and making certain illustrations.