The Effect Of Organizational Identification To Multi-agent Cooperation And Competition

Focusing on the free-rider problems in teamwork, this paper uses the standard theoretic framework to study the mechanism of free-rider problem and the role of organizational identification in stimulating employees to improve organizational performance. Based on the possibility of cooperation and competition between the members in teamwork, this paper uses moral hazard framework towards Multi-Agent Cooperation to study the relationship between the organizational identification with the competitive equilibrium or cooperative equilibrium.The results about the organizational performance show that the free-rider problem is not only caused by the unobservability of employees’behaviors, but also is the result of the balancing budget constraint. The organizational Pareto efficiency and the budget constraint can be achieved simultaneously with organizational identification, because the identifying employees could accept the lower distribution of output, leaving the non-identifying ones a higher level of output allocation and then balancing the budget constraint. The residual output for the organization would increase with an increase in employees’organizational identification, which implies, under Pareto efficiency, an increase (a decrease) in organizational identification can increase (decrease) the organizational performance.With the principal-agent model, without the consideration of organizational identification, the principal would not give out a linear incentive contract against his Pareto efficiency to motivate agents those with complementary effort to cooperate and those action substitutes to compete. When taking organizational identification into concern, as agents’risk appetite approaches to Risk-neutral or their outputs with certainty, the principal can make out a contract to incentive agents those with complementary effort to cooperate and those action substitutes to compete, at the same moment with his Pareto efficiency. This model shows that organizational identification is the key of the possibility with the competitive equilibrium and cooperative equilibrium.