Delegation enables better-informed workers to allocate tasks more efficiently when uncertainty is high relative to the incentive conflict between manager and worker. To do so, we model a managerial decision environment in which a manager both determines the skill heterogeneity of the workers and determines whether to retain or delegate the ability to allocate tasks. We study how organizations use team selection and delegation of authority jointly to navigate uncertain environments. We note that, while communication has been shown to foster coordination in other contexts (for example, in public goods games, market entry games and competitive coordination games) this contribution is in the context of a production game where specialisation is crucial. Using text classification algorithms (Multinomial Naive Bayes) we quantitatively analyse the available chat data and we provide insight into the kind of communication that fosters specialisation in the absence of external involvement. We find strong evidence in favour of the emergence of Spontaneous Order, with communication being an important factor. Based on this framework, we investigate whether Spontaneous Order can emerge, without it being imposed by the government. This form of production can be characterised as a cooperative game, where the Nash equilibrium predicts that the optimal outcome is achieved when each member of this society specialises in the provision of a single input. We then study more complex societies by increasing the size of the society (groups of 6 and 9 subjects) and the number of inputs (6 and 9 inputs respectively), as well as the combinations of inputs that each subject can provide. ![]() We start with a simple society consisting of just two people, two inputs, one final good and in which the production process exhibits returns to specialisation. Our experimental design is based on a production game with a convex input provision possibility frontier, where subjects have to choose a point on this frontier. We report on an experimental investigation of the emergence of Spontaneous Order, the idea that societies can co-ordinate, without government intervention, on a form of society that is good for its citizens, as described by Adam Smith.
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