@techreport{Roider2004Delegation,
abstract = {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.},
author = {Andreas Roider},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {L14; D23; D82; L22; 330; delegation; decentralization; authority; incomplete contracts; hold-up; property rights; Kooperative F\"{u}hrung; Dezentrale Organisation; Unvollst\"{a}ndiger Vertrag; Eigentumsrechtstheorie; Investition; Sunk Costs; Theorie},
language = {eng},
number = {1298},
title = {Delegation of Authority as an Optimal (In)complete Contract},
type = {IZA Discussion paper series},
url = {http://hdl.handle.net/10419/20564},
year = {2004}
}
