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http://hdl.handle.net/10419/28023
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| Title: | | The allocation of authority under limited liability  |
| Authors: | | Puschke, Kerstin |
| Issue Date: | | 2005 |
| Series/Report no.: | | Diskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft der Freien Universität Berlin 2005/25 |
| Abstract: | | Authority is modelled as the right to undertake a non-contractible decision in a joint project. We show that the allocation of authority depends on bargaining power and differences in both parties cost functions. The decision-maker is assumed to exert an externality on the other parties. Overall surplus is shared according to generalized Nash bargaining. Under limited liability, the agent with the larger cost parameter receives authority if the agents cost parameters are very different. If the agents have similar cost parameters, bargaining power determines the allocation of authority. Possible applications include the introduction of a new product. |
| Subjects: | | Authority Decision Rights Incomplete Contracts |
| JEL: | | D23 L22 L24 |
| ISBN: | | 3938369248 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Diskussionsbeiträge, FB Wirtschaftswissenschaft, FU Berlin
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