Authority and Communication in Organizations
This paper studies delegation as an alternative to communication. We show that a principal prefers to delegate control to a better informed agent rather than to communicate with this agent as long as the incentive conflict is not too large relative to the principal's uncertainty about the environment. We further identify cases in which the principal optimally delegates control to an “intermediary”, and show that keeping a veto-right typically reduces the expected utility of the principal unless the incentive conflict is extreme. Copyright 2002, Wiley-Blackwell.
Year of publication: |
2002
|
---|---|
Authors: | Dessein, Wouter |
Published in: |
Review of Economic Studies. - Oxford University Press. - Vol. 69.2002, 4, p. 811-838
|
Publisher: |
Oxford University Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Network competition in nonlinear pricing
Dessein, Wouter, (2000)
-
Network competition with heterogeneous calling patterns
Dessein, Wouter, (2000)
-
Centralization versus decentralization : an application to price setting by a multi-market firm
Alonso, Ricardo, (2008)
- More ...