Relational delegation

Arbeitspapier

We explore the optimal delegation of decision rights by a principal to a better informed but biased agent. In an infinitely repeated game a long-lived principal faces a series of short-lived agents. Every period they play a cheap talk game ala Crawford and Sobel (1982) with constant bias, quadratic loss functions and general distributions of the state of the world. We characterize the optimal delegation schemes for all discount rates and show that they resemble organizational arrangements that are commonly observed, including centralization and threshold delegation. For small biases threshold delegation is optimal for almost all distributions. Outsourcing can only be optimal if the principal is sufficiently impatient.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CSIO Working Paper ; No. 0065

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Organizational Behavior; Transaction Costs; Property Rights ; Asymmetric and Private Information; Mechanism Design ; Organization of Production
• Thema: delegation ; cheap talk ; relational contract.

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Alonso, Ricardo ; Matouschek, Niko
• Ereignis: Veröffentlichung
• (wer): Northwestern University, Center for the Study of Industrial Organization (CSIO)
• (wo): Evanston, IL
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/38706
• Letzte Aktualisierung: 20.09.2024, 08:25 MESZ