Relinquishing power, exploitation and political unemployment in democratic organizations

This paper focus on the dynamics of organizations and how they design its future according to the interest of their members. Agents are grouped into three classes, high, medium and low productivity. We analyze the evolution of organizations which take decisions by majority voting. We focus on the evolution of the political power and show that in some cases, rational agents who valuate the future may yield political power to other class. This is what we call the relinquish e¤ect. We show that exploitation is possible in democratic societies and study its determinants. We also show that high productivity agents may be left in the cold because their entrance in an organization may threaten the dominance of other classes. We call this political unemployment. JEL classi…cation: C7, D7. Keywords: dynamics of organizations . Thanks to Humberto Llavador, Jan Zapal and participants in seminars at Carlos III and Pablo de Olavide universities for very good comments. Thanks to the MOMA network under the project ECO2014-57673-REDT for …nancial support. The …rst author acknowledges …nancial support from ECO2014 53051, SGR2014-515 and PROMETEO/2013/037. Luis Corchon and Antonio Romero-Medina acknowledge …nancial support from MEC under project ECO2014_57442_P, and …nancial support from the Ministerio Economía y Competitividad (Spain), grants MYGRANT and MDM 2014-0431. yUniversidad de Alicante. zUniversidad Carlos III de Madrid. xUniversidad Carlos III de Madrid.