A classic 1993 economics paper is “A Theory of `Yes Men.’“: This paper illustrates an incentive for workers to conform to the opinion of their supervisors when firms use subjective performance evaluation. This desire to conform arises endogenously from the firm’s need to induce the worker to exert effort.
I haven't read the article, but from your summary it sounds like they're folding in a bunch of possible factors that need to be teased out.
The overall model has four categories of agents: (1) a class of subordinates (2) a class of supervisors of subordinates (3) a class of supervisors of supervisors, (4) an organization which they are all subcomponents of.
The organization in the model seems to be the only component that has a single goal of survival. At least one of the other three categories of agents seems to have a second hardwired goal (a potential "bias") that could conflict with their goal of survival.
In your description and analysis of the article, you seem to provide alternate hypotheses that the second hardwired goal is rooted in either the class of subordinates*, or the class of supervisors of supervisors. For the sake of relative comprehensiveness in considering this model, it seems reasonable to also consider a hypothesis that the "bias" is rooted in the supervisor-of-subordinates (he is his own audience for his signal of dominance over subordinates).
Also, I think the dominance-signalling model has to be teased out from the boss-is-intelligent signalling model, because those are two separable signals for traits that are considered valuable in a mid-level analyst/administrator/manager. Dominance-signalling is probably good for general administrative efficiency across a bias gradient (our primate bias against unified action in the absence of a group-accepted dominator) and boss-is-intelligent is probably valuable for more abstractly rational reasons (like "this same-priced computer produces more accurate modeling/forecasting results".
*Is that what you mean by this line, since you seem to distinguish it from your model of evaluations of supervisors by the supervisors-of-supervisors: "One explanation is that bosses must signal dominance, and show they have the full cooperation of their subordinates." In other words, are you saying that the bosses must signal this dominance specifically to the subordinates, for example to ensure their full cooperation? That's how I took it, as hypothesizing a hard-wired bias in the subordinates, as an alternative to the rest of the paragraph where you seemed to be hypothesizing a hard-wired bias in the supervisors-of-supervisors.
Sorry about the relative incoherence and incompleteness of this comment, but real life intrudes.
True, but the model still seems incomplete without mentioning estimates of the quality of the process used to determine S.
Is there evidence that "yes men" are a widespread problem? In the (admittedly abnormal) places I've worked, its seemed more fashionable to disagree with the management. Some of this behavior was likely the employee's attempts to signal intellectual superiority over his boss (i.e., a geek always wants to look smarter than a suit). I'm thinking this is probably more common in engineering and applied sciences.
anonymous, it fits about as well as elsewhere
Grant, the basic problem remains even when the boss has other clues about the quality of signal S.
Jim, yes and the point is that few bosses use such tests; they don't want to fire yes men.
It's worth mentioning here that there is an established test for distinguishing thinkers from Yes Men: put out a fake opinion, and fire everyone who expresses agreement. http://www.overcomingbias.c...
The signal-estimate model does seem very flawed to me, because bosses have other means of estimating how close S is to X. If the boss has a good understanding of what his employees are doing, he can look at how hard they are working, what factors they are taking into account, what alternative approaches other employees are taking, etc. In other words they can judge the process to estimate the accuracy of the end result.
Employees are always incentivized to give their boss what they want. If the boss does not have an understanding of the employee's work, this is going to deviate from what needs to be done.
If the boss-employee knowledge gap is large, then it seems like prediction markets or prizes would be better mechanisms to cut down on yes-men. The boss can then reward employees based on their performance after the fact.
How closely do you think the above model fits the higher realms of academic economics?