Responsibility Hoarding by Overconfident Managers

Petra Nieken, Abdolkarim Sadrieh () and Nannan Zhou
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Petra Nieken: Institute of Management, Karlsruhe Institute of Technology (KIT), 76131 Karlsruhe, Germany
Abdolkarim Sadrieh: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg, 39106 Magdeburg, Germany
Nannan Zhou: Independent Researcher, 50969 Cologne, Germany

Games, 2025, vol. 16, issue 4, 1-24

Abstract: Overconfidence is a well-established behavioral bias that involves the overestimation of one’s own capabilities. We introduce a model in which managers and agents exert effort in a joint production, after the manager decides on the allocation of the tasks. A rational manager tends to reduce their own effort by delegating the critical task to the agent more often than in an efficient task allocation. In contrast, an overconfident manager engages in responsibility hoarding, i.e., is likely to delegate a critical task less often to the agent than a rational manager. In fact, a manager with a sufficiently high ability and a moderate degree of overconfidence increases the total welfare by refusing to delegate critical tasks and by exerting more effort than a rational manager. Finally, we derive the conditions under which the responsibility hoarding can persist in an organization, showing that the bias survives as long as the overconfident manager can rationalize the observed output by underestimating the ability of the agent.

Keywords: organizational behavior; management performance; bounded rationality; reluctance to delegate; task delegation; leadership behavior; bias in human resource management (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2025
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