Delegated Information Acquisition and Capital Budgeting: On the Separation of Project Evaluation and Project Management

Christian Laux

Journal of Institutional and Theoretical Economics (JITE), 2001, vol. 157, issue 4, 591-607

Abstract: The paper analyzes the question who should be provided with incentives to acquire and reveal information about the quality of an investment proposal: the division manager, who derives private benefits of control from the project and always wants to invest, or the capital budgeting department, which has no personal interests in the decision. Interestingly, private benefits of control may reduce expected wage costs. In this case joint project evaluation and project management is optimal.

JEL-codes: D82 G31 J33 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/delegated-i ... 16280932456012974503 (text/html)
Fulltext access is included for subscribers to the printed version.

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:mhr:jinste:urn:sici:0932-4569(200112)157:4_591:diaacb_2.0.tx_2-8

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

Access Statistics for this article

Journal of Institutional and Theoretical Economics (JITE) is currently edited by Gerd Mühlheußer and Bayer, Ralph-C

More articles in Journal of Institutional and Theoretical Economics (JITE) from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().