On Delegation under Relational Contracts

Oliver Gürtler

No 32/2005, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: The benefits and costs of different forms of job design have been analyzed in the literature yet. The focus has thereby mostly been on job designs under formal contracts between the parties. However, in the real world relational contracts - informal agreements sustained by the value of future relationships - play a role as important as formal ones. This paper therefore considers the advantages and disadvantages of two different kinds of job design, partial del- egation and complete delegation with specialization, when the parties make use of both, formal and informal agreements. It is found that many of the results derived in the absence of informal contracts will no longer hold, if these contracts become available.

Keywords: Job design; relational contracts; formal contracts; delegation (search for similar items in EconPapers)
JEL-codes: D82 J33 L23 M52 M54 (search for similar items in EconPapers)
Date: 2005
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Working Paper: On Delegation under Relational Contracts (2006)
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