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Erscheinungsjahr: 
2023
Quellenangabe: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 14 [Issue:] 6 [Article No.:] 71 [Year:] 2023 [Pages:] 1-20
Verlag: 
MDPI, Basel
Zusammenfassung: 
In this paper, we investigate optimal delegation mechanisms in the presence of countervailing conflicts of interest in the context of principal-agent problems. We introduce two dimensions of conflict of interest-pandering incentives related to the outside option and project biases. We compare three delegation mechanisms: full delegation, veto-based delegation, and communication (no delegation). Contrary to conventional one-dimensional conflict models, our findings reveal a non-monotonic relationship between pandering incentives and bias. These conflicts counterbalance each other, resulting in a principal’s benefit from delegation not strictly decreasing with increased bias. Surprisingly, delegation to a biased agent can be advantageous in certain scenarios. This research sheds light on the complex dynamics of delegation mechanisms when confronted with countervailing conflicts of interest, offering insights into decision-making in principal-agent relationships.
Schlagwörter: 
bias
delegation
pandering
principal-agent relationship
JEL: 
D78
D82
D83
L22
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