The Organization of Delegated Expertise

David Martimort and Denis Gromb

No 4572, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper proposes a theory of the optimal organization of delegated expertise. For incentive purposes, a principal should reward an expert when their recommendation is confirmed either by the facts or by other experts? recommendations. With a single expert, we show that the agency costs of delegated expertise exhibit diseconomies of scale. Possible organizational responses to this problem include basing decisions on a less than optimal amount of information, and relying on multiple experts. We analyse the source of gains from having multiple experts in different contracting environments corresponding to different nexi of collusion between the principal and/or the experts.

Keywords: Expertise; Organization; Collusion (search for similar items in EconPapers)
JEL-codes: D80 (search for similar items in EconPapers)
Date: 2004-08
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
https://cepr.org/publications/DP4572 (application/pdf)

Related works:
Working Paper: The Organization of Delegated Expertise (2004)
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:cpr:ceprdp:4572

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4572

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().