In an experiment, we model two stylized facts about capital budgeting practice, budgetary slack creation and delegation of decision-making authority. In our setting, under centralization, headquarters announces a budget, the division manager gives a cost report, and headquarters decides on the...

Prior research suggests that providing managers with discretion over team bonus allocation can improve team performance because it enhances the relation between team members’ contributions to team output and their rewards. This study investigates whether task interdependence influences...