Tamada, Yasunari and Tsai, Tsung-Sheng (2009): The Allocation of Decision-Making Authority when Principal has Reputation Concerns.
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This paper analyzes the allocation of decision-making authority when the principal has reputation concerns. The principal can either keep the authority, or delegate it to the agent, who has better information. An outside evaluator who forms the principal's reputation cannot observe who makes the decision. The key feature of this paper is that the principal can in°uence her reputation through her delegation policy. With reputation concerns, we show that the principal tends to keep too much the authority from the evaluator's point of view, even though sometimes her information is not good enough for her to make the decision on her own.
|Item Type:||MPRA Paper|
|Original Title:||The Allocation of Decision-Making Authority when Principal has Reputation Concerns|
|Keywords:||Decision-making authority, delegation, reputation concerns|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships; Contracts and Reputation; Networks
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
|Depositing User:||Tsung-Sheng Tsai|
|Date Deposited:||24. Jan 2010 19:05|
|Last Modified:||16. Feb 2013 01:09|
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