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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/20564| Title: | Delegation of Authority as an Optimal (In)complete Contract |
| Keywords: | L14 D23 D82 L22 ddc:330 delegation decentralization authority incomplete contracts hold-up property rights Kooperative Führung Dezentrale Organisation Unvollständiger Vertrag Eigentumsrechtstheorie Investition Sunk Costs Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | The present paper aims to contribute to the literature on the foundations of incomplete contracts by providing conditions under which simple delegation of authority is the solution to the complete-contracting problem of the parties. We consider a hold-up framework where both parties profit from an investment that raises the value of an asset. Delegation turns out to be optimal if (i) the decision-dependent parts of the payoffs of the parties are linear in the asset value, and (ii) decisions have no investment-independent effect. If overinvestment might be an issue, delegation, however, with restricted competencies is optimal if some additional continuity requirements are met. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/20564 |
| Other Identifiers: | http://hdl.handle.net/10419/20564 ppn:464451868 |
| Appears in Collections: | EconStor |
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