Designing communication hierarchies

Dimitri Migrow

Journal of Economic Theory, 2021, vol. 198, issue C

Abstract: This paper studies the design of communication hierarchies in a setup with a principal and multiple agents with private agendas. The agents observe unverifiable binary signals relevant to the principal's choice and the principal is uninformed. The principal can only decide who reports to whom and in which order. We show that a two-layer hierarchy where all agents report directly to the principal is dominated by hierarchies with a larger number of layers. We characterize conditions for the choice of a three-layer hierarchy with a single intermediator, and for the choice of a three-layer hierarchy with two intermediators where the agents are separated according to their preferences.

Keywords: Organizational design; Strategic communication; Information aggregation (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:198:y:2021:i:c:s0022053121001666

DOI: 10.1016/j.jet.2021.105349

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