Relational delegation
By: by Ricardo Alonso, Niko Matouschek.
Contributors: Matouschek, Niko
Series: Discussion paper ;; no. 1454; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1454
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Decision-making.; Agency (Law); Delegation of powers.
Description: "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"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 4/27/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.