Optimal hierarchies with diverse decision-makers
Puschke, Kerstin

Main titleOptimal hierarchies with diverse decision-makers
AuthorPuschke, Kerstin
No. of Pages27 S.
SeriesDiskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft ; 2007/10 : Volkswirtschaftliche Reihe
Keywordsauthority, decision rights, incomplete contracts
Classification (DDC)330 Economics
Also published in
AbstractWe analyze the optimal decision-making hierarchy in an organization
when decision-makers of limited liability have preferences conflicting
with the organization’s objective and exert externalities on
their counterparts. In a horizontal hierarchy, every decision is made
by a different agent. In a vertical hierarchy, one agent is in charge of
all decisions. Only this agent is incentivized. This advantage is outweighed
if there is a horizontal hierarchy so that the decision-makers’
preferences are close to the organization’s objective with respect to
the decision they are in charge of but far from the organization’s objective
for the other decisions.
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FU DepartmentDepartment Business and Economics
Year of publication2007
Type of documentBook
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Created at2008-06-11 : 08:42:43
Last changed2008-06-11 : 08:43:08
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000000193