Hougaard, Jens LethMoreno-Ternero, Juan D.Osterdal, Lars P.2025-01-072025-01-072021-11-23Jens Leth Hougaard, Juan D. Moreno-Ternero, Lars Peter Østerdal (2021) Optimal Management of Evolving Hierarchies. Management Science 68(8):6024-6038. https://doi.org/10.1287/mnsc.2021.418510.1287/mnsc.2021.4185https://hdl.handle.net/10433/22188FECYT -- JUSTICIA ECONOMICA Y BIENESTAR SOCIAL EN UN CONTEXTO DE RECURSO... FECYT -- FUNDAMENTOS NORMATIVOS PARA INDICADORES SOCIO-ECONOMICOSWe study the optimal management of evolving hierarchies of revenue-generating agents. The initiator invests into expanding the hierarchy by adding another agent, who will bring revenues to the joint venture and who will invest herself into expanding the hierarchy further, and so on. The higher the investments (which are private information), the higher the probability of expanding the hierarchy. An allocation scheme specifies how revenues are distributed, as the hierarchy evolves. We obtain schemes that are socially optimal and initiator-optimal, respectively. Our results have potential applications for blockchain, cryptocurrencies, social mobilization, and multilevel marketing.application/pdfenAttribution-NonCommercial-NoDerivatives 4.0 Internationalhttp://creativecommons.org/licenses/by-nc-nd/4.0/Optimal allocation schemesHierarchiesManagementNash equilibriumBlockchainjournal articleopen access