Centralized and Decentralized Decision Making in Organizations
This article identifies a new type of cost associated with centralization. If workers are liquidity constrained, it may be less costly to motivate a worker who is allowed to work on his own idea than a worker who is forced to follow the manager's idea. Thus, it may be optimal to let workers decide on the method for doing their job even if managers have better information. This conclusion holds even if more general contracts are considered that are based on communication of information between the worker and the manager, as long as these general contracts are not entirely costless.
Year of publication: |
2002
|
---|---|
Authors: | Zabojnik, Jan |
Published in: |
Journal of Labor Economics. - University of Chicago Press. - Vol. 20.2002, 1, p. 1-22
|
Publisher: |
University of Chicago Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Information Sharing and Incentives in Organizations
Bettignies, Jean-Etienne de, (2013)
-
Subjective Evaluations with Performance Feedback
Zabojnik, Jan, (2011)
-
Stock-based Compensation Plans and Employee Incentives
Zabojnik, Jan, (2014)
- More ...