tailieunhanh - Microeconomics for MBAs 16

Microeconomics for MBAs 16. The Economic Way of Thinking for Managers. Microeconomics for MBAs develops the economic way of thinking through problems that MBA students will find relevant to their career goals. Maths is kept simple and the theory is illustrated with real-life scenarios | Chapter 5 The Logic of Group Behavior In Business and Elsewhere 19 tough boss monitoring all workers and unmercifully penalizing those who dare shirk Jane will find that she is more than compensated because her fellow workers have also quit shirking. Instead of being in an unproductive firm surrounded by a bunch of other unproductive workers each receiving a payoff of 50 she will find herself as part of a hard-working cooperative team of workers each receiving a payoff of 100. The common perception is that bosses hire workers and in most situations this is what appears to happen. Bosses see benefits that can be realized only by having workers and so they hire them. But since it is also true that workers see benefits that can be realized only from having a boss it is reasonable to think of workers hiring a boss and preferably a tough one. Table Shirking in Large Worker Groups Other Workers None shirk Some shirk All shirk Jane Don t shirk 100 75 25 Shirk 90 65 15 Actual Tough Bosses The idea of workers hiring a tough boss is illustrated by an interesting though probably apocryphal story of a missionary in 19th century China. Soon after arriving in China the missionary who was then full of enthusiasm for doing good came upon a group of men pulling a heavily loaded barge up a river. Each man was holding on to a rope attached to the barge as he struggled forward against the river s current while on the barge was a large Chinaman with a long whip with which he lashed the back of anyone who let his rope go slack. Upon seeing this the missionary experienced a surge of indignation and rushed up to the group of Chinamen to inform them that he would put an end to such outrageous abuse. Instead of being appreciative of the missionary s concern however the Chinamen told him to butt out that they owned the barge they earned more money the faster they got the cargo up the river and they had hired the brute with the whip to eliminate the temptation each would otherwise have to

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