Delegation and incentives

A-Tier
Journal: RAND Journal of Economics
Year: 2008
Volume: 39
Issue: 3
Pages: 664-682

Authors (2)

Helmut Bester (Freie Universität Berlin) Daniel Krähmer (not in RePEc)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This article analyzes the relation between authority and incentives. It extends the standard principal‐agent model by a project selection stage in which the principal can either delegate the choice of project to the agent or keep the authority. The agent's subsequent choice of effort depends both on monetary incentives and the selected project. We find that the consideration of effort incentives makes the principal less likely to delegate the authority over projects to the agent. In fact, if the agent is protected by limited liability, delegation is never optimal.

Technical Details

RePEc Handle
repec:bla:randje:v:39:y:2008:i:3:p:664-682
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-24