Delegation to a Group

Sebastian Fehrler and Moritz Janas ()
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Moritz Janas: University of Konstanz

No 14426, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the choice of a principal to either delegate a decision to a group of careerist experts, or to consult them individually and keep the decision-making power. Our model predicts a trade-off between information acquisition and information aggregation. On the one hand, the expected benefit from being informed is larger in case the experts are consulted individually. Hence, the experts either acquire the same or a larger amount of information, depending on the cost of information, than in case of delegation. On the other hand, any acquired information is better aggregated in case of delegation, where experts can deliberate secretly. To test the model's key predictions, we run an experiment. The results from the laboratory confirm the predicted trade-off, despite some deviations from theory on the individual level.

Keywords: group decision-making; committees; decision rights; delegation; expert advice; strategic communication (search for similar items in EconPapers)
JEL-codes: C92 D23 D71 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2021-05
New Economics Papers: this item is included in nep-exp and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Management Science, 2021, 67, 3714-3743

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Journal Article: Delegation to a Group (2021)
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