Delegation and Value Creation

Gerald Eisenkopf () and Stephan Nüesch ()
Additional contact information
Gerald Eisenkopf: Department of Economics, University of Konstanz, Germany
Stephan Nüesch: Business Economics - Corporate Governance - Personnel Economics, University of Zurich, Switzerland

No 2013-13, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

Abstract: Many scholars argue that the delegation of decision rights to independent institutions promotes trust and specific investments. We test this conjecture with variations of the trust game in which the back transfer decision is delegated to a third party. A randomly chosen third party with a fixed payment induces larger investments over time although the experimental design rules out reputation building. Changes in the third party’s selection procedure eliminate this benefit. If the third party gets a reward for the appointment, delegation actually destroys trust. Investors (unwarrantedly) fear a diffusion of responsibility and lower back transfers in this case.

Keywords: Delegation; Trust; Third Party; Appointment procedures; Remuneration (search for similar items in EconPapers)
JEL-codes: D33 J33 J41 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2013-06-20
New Economics Papers: this item is included in nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.uni-konstanz.de/FuF/wiwi/workingpaperse ... opf-Nueesch_2013.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:knz:dpteco:1313

Ordering information: This working paper can be ordered from
https://www.wiwi.uni-konstanz.de/en

Access Statistics for this paper

More papers in Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz Contact information at EDIRC.
Bibliographic data for series maintained by Office Ursprung ( this e-mail address is bad, please contact ).