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 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 …

's trust of management and the delegation of real authority. We utilize both fixed effects and instrumental variables to … trust. Across all specifications, we find that delegation of real authority is more likely if an employee trusts management …