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This paper introduces a model of a stylized organization that is comprised ofseveral departments that autonomously allocate tasks. To do so, the departmentseither take short-sighted decisions that immediately maximize their utility ortake long-sighted decisions that aim at minimizing the interdependenciesbetween tasks. The organization guides the departments' behavior by either anindividualistic, a balanced, or an altruistic linear incentive scheme. Even iftasks are perfectly decomposable, altruistic incentive schemes are preferredover individualistic incentive schemes since they substantially increase theorganization's performance. Interestingly, if altruistic incentive schemes areeffective, short-sighted decisions appear favorable since they do not onlyincrease performance in the short run but also result in significantly higherperformances in the long run.

On the Role of Incentives in Evolutionary Approaches to Organizational Design