<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>We study a principal's choice to centralize or delegate decisions to an agent when delegation can be used to encourage the agent to communicate potential problems. We find that the principal may choose centralization either to exercise better control over the agent's actions or to...

We consider a principal-agent model where the agent is hired to take an action on behalf of the principal. The agent can exert costly effort to learn the true state of the world. If he fails to discover the state, he can end an inquiry to the principal who then can exert (additional) costly...

Overconfident CEOs are more willing to initiate investment projects that require experimentation, yet tend to defer responding to the bad news when the project is not performing as planned. Accounting conservatism accelerates the recognition of the bad news and its dissemination to gatekeepers,...