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| Author: | Dessein, W. |
| Title: | Authority and communication in organizations |
| Journal: | Review of Economic Studies
2002 : OCT, VOL. 69:4(241), p. 811-838 |
| Index terms: | Organizational research Authority Communication |
| Language: | eng |
| Abstract: | The author studies delegation as an alternative communication. He shows that a principal prefers to delegate control to a better informed agent rather than to communicate with this agent as long as the incentive conflict is not too large relative to the principal's uncertainty about the environment. The author further identify cases in which the principal optimally delegates control to an "intermediary", and show that keeping a veto-right typically reduces the expected utility of the principal unless the incentive conflict is extreme. |
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