Delegation and Communication

Malin Arve and Takakazu Honryo

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper analyzes delegation and joint decision making in an environment with private information and partially aligned preferences. We compare the benefits of these two decision making procedures as well as the interaction between them. We give a condition under which delegation is preferred to ex post joint decision making and we show how the interaction between delegation and ex post joint decision making always crowds out delegation. Finally, we analyze how the availability of the principal at the communication stage affects our results.

JEL-codes: D23 D82 L23 (search for similar items in EconPapers)
Date: 2015-09-22
New Economics Papers: this item is included in nep-cdm and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:524

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