A reputational model of authority

The paper provides a model where authority relaionships are founded on repu tation. The viability of authority is the result of subordinates' free-ridi ng on each other's challenges, reducing the frequency of challenges, and ma king reputation worth defending. The party with authority secures subordina tes' compliance through the payment of rents to influence the extent of the ir failure to act collectively and exacerbate the free-rider problem they f ace. The model provides a framework to explain how the magnitude and form o f these rents depend on the primitives of the environment and on the author ity's design of its reputation. Applications to employment relationships, d ictatorships, and the notion of legitimacy are considered. (C) 2001 Elsevie r Science B.V. All rights reserved.