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Uncertainty, Risk Attitudes and Endogenous Authority
China Journal of Economics 2022, 9(3): 227-251
Published: 10 February 2026
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Based on Knight's thought of uncertainty and authority, this paper provides a formal model for the issues of endogenous authority. We proved that the greater difference in risk attitude between the team members, the more likely the team would form a hierarchical structure in which the risk-taker becomes the leader and the risk-averter becomes the follower. Meanwhile, the greater difference in cognitive level between the team members, the more likely the team would form a hierarchical structure in which the member with higher cognitive level becomes the leader, and the member with lower cognitive level becomes the follower.

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