We formalize a conception of authority, which is commonly defined as the right of controlling a person's actions … embedded in human assets in sociology. Due to the inalienable property of human assets, the contractible formal authority is … hard to verify and enforce, while real authority usually diverges from formal authority. Inefficiency tends to arise when a …

We analyze the optimal allocation of authority in an organization whose members have conflicting preferences. One party … has decision-relevant private information, and the party who obtains authority decides in a self-interested way. As a … optimal to assign authority to the informed and not to the uninformed party, irrespective of the parties' conflict of interest …

Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However … behavioral forces shape an important transaction cost of integration - the abuse of authority - and by providing an empirical …