Jingran Yang

Competitive Dynamics in Organizations Manuscript.pdf

With Qijing Yang

Best Paper Award 2025, Institutional and Organizational Economics Academy (IOEA)

Abstract

Competitive dynamics play a fundamental role in shaping economic efficiency, yet existing research has primarily focused on dynamic competition in markets, often overlooking the deliberate design of competition within organizations. This paper develops a principal-agent model to analyze how superiors strategically adjust internal competition intensity in response to their authority level and the number of loyal subordinates. Unlike market competition, which is constrained by external conditions, organizational competition is an endogenous mechanism shaped by superiors’ discretionary choices. We show that the ideal competition assumed in tournament theory is only a special case occurring under extremely strong authority, while in most scenarios, competition intensity fluctuates, leading to variations in organizational productivity. Our model implicates that both democratic and non-democratic regimes can achieve high economic performance, provided they either establish a strong rule of law to reinforce the political leader's authority or maintain a substantial base of loyal supporters to enhance informal power. However, in the absence of either, economic performance declines as the political leader reduces competition to maintain political stability. Our findings offer new insights into the relationship between political authority, internal competition, and economic performance, contributing to broader debates on institutional design, regime performance, and productivity divergence.

Does Halting Institutional Adaptation Weaken Authoritarian Resilience? Evidence from Village Elections in China
With John James Kennedy 

The Nature and Origins of Affective Polarization