|
EconStor >
Rheinische Friedrich-Wilhelms-Universität Bonn >
Bonn Graduate School of Economics (BGSE), Universität Bonn >
Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/22837
|
| | |
| Title: | | Delegation of Authority as an Optimal (In)complete Contract  |
| Authors: | | Roider, Andreas |
| Issue Date: | | 2003 |
| Series/Report no.: | | Bonn econ discussion papers 2003,8 |
| Abstract: | | In a holdup framework, I provide conditions under which simple delegation of authority is a solution to the complete-contracting problem even though ex-post actions are ex-ante contractible, and unlimited transfer payments are feasible. In particular, delegation turns out to be optimal if the payoff functions of the parties satisfy certain separability and symmetry conditions, and the parties face an underinvestment problem. This result is extended to the case of potential overinvestment and to multi-dimensional effort provision. Besides providing a complete-contracting rationale for delegation, the findings contribute to the foundation of incomplete contracts and the property-rights theory of the firm. |
| Subjects: | | delegation decentralization authority incomplete contracts holdup property rights |
| JEL: | | L22 D82 L14 D23 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/22837
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|