This paper analyses the relation between authority and incentives. It extends the standard principal--agent model by a …. The agent's subsequent choice of effort depends both on monetary incentives and the selected project. We find that the … consideration of effort incentives makes the principal less likely to delegate the authority over projects to the agent. In fact, if …

talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …

. Contingent fees provide better incentives than conditional fees independently of whether upfront payments are restricted to be …

prices by introducing delegation into a standard Lucas exchange economy. In equilibrium, some investors trade on their own … is high, funds with identical incentives employ heterogeneous trading strategies. A group of managers borrows to take on …

, the extent of delegation and equilibrium prices are all determined endogenously within the model we consider. Symmetric …

Why do firms delegate job design decisions to workers, and what are the implications of such delegation? We develop a … private-information based theory of delegation, where delegation enables high-ability workers to signal their ability by … delegation: when market observability of job content is high, the compensation needed to get low ability workers to self-sort is …

Delegation to independent bodies whose preference can be different from those of the government has been shown to have … delegation in the context of a cost-reimbursement procurement problem. Our solution combines several features of the modern … heterogeneity across regulators available. We find that delegation to an independent industry regulator, whose preferences are more …