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This paper reports the results from a laboratory experiment investigating a manager's decision whether or not to … send more informative messages under communication than predicted by the pure strategy equilibria. This finding neither … mixed strategy equilibrium under communication, which strictly outperforms optimal restricted delegation and is relatively …
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delegate more often than under verifiable effort costs. Moreover, we show that the benefit of communication between the … delegation may be preferred over truthful communication …
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We analyze delegation of a set of decisions over time by an informed principal to a potentially biased agent. Each period the principal observes a state of the world and sends a “cheap-talk” message to the agent, who is privately informed about her bias. We focus on principal-optimal...
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