Delegation and incentives
Bester, Helmut ;  Krähmer, Daniel ;  ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titleDelegation and incentives
AuthorBester, Helmut
AuthorKrähmer, Daniel
EditorUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages31 S.
Series ; 2007,1 : Volkswirtschaftliche Reihe
Keywordsauthority, delegation, incentives, moral hazard, principal-agent problem, limited liability
Classification (DDC)332 Financial economics
Also published in
AbstractThis paper analyses the relation between authority and incentives. It extends
the standard principal-agent model by a project selection stage in which the prin-
cipal 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.
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FU DepartmentDepartment Business and Economics
Year of publication2007
Type of documentBook
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Created at2008-06-10 : 08:03:36
Last changed2016-01-05 : 02:38:10
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000000147