Interaction in organizations: A dynamic choice of codes

Individuals within a firm have to choose the way in which they develop the tasks that are assigned to them. In the model proposed in this paper, workers choose between two codes. They are rewarded according to their productivity and this depends on the selected code in two ways: first, the best understood code is likely to be the one chosen by the worker; second, it is important to select a code that others also use in order to accomplish team work benefits. A memory loss element is introduced, reflecting the presence of a myopic attitude in the choice process, and an intensity of choice component is also considered, making the selection of a code a process where bounded rationality prevails. Under the proposed setup, one identifies a steady state point, to which the system is likely to converge, and that reveals the long-term probability value of choosing one of the two codes.