The internal organization of large firms as well as procurement and regulation contexts frequently involve a hierarchical nexus of contracts, with substantial delegation of decision making across layers. Such hierarchical delegation of decision making creates problems of aligning incentives of...

Agents in a hierarchy are commonly delegated authority to communicate and contract with agents at lower levels. While delegation reduces the burden of communication and information processing on the principal, it also introduces additional incentive problems. We find that with sufficient...

When consumers' willingness-to-pay increases by a uniform amount, the change in the resulting monopoly price is generally indeterminate. Our analysis identifies sufficient conditions on the underlying demand curve which predict both the sign and the magnitude of the resulting price change.