Externalities, communication and the allocation of decision rights
Bester, Helmut ;  ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titleExternalities, communication and the allocation of decision rights
AuthorBester, Helmut
EditorUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages29 S.
Series ; 2005,21 : Volkswirtschaftliche Reihe
Keywordsauthority, decision rights, externalities, incomplete contracts, imperfect information, theory of the firm
Classification (DDC)330 Economics
Also published in
AbstractThis paper views authority as the right to undertake decisions that impose
externalities on other members of the organization. When only decision rights
can be contractually assigned to one of the organization's stakeholders, the
optimal assignment minimizes the resulting ineffciencies by giving control
rights to the party with the highest stake in the organization's decisions.
Under asymmetric information, the effcient allocation of authority depends
on the communication of private information. In the case of multiple decision
areas, divided control rights may enhance organizational effciency unless there
exist complementarities between different decisions.
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FU DepartmentDepartment Business and Economics
Year of publication2005
Type of documentBook
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Created at2008-06-24 : 09:02:51
Last changed2016-01-05 : 02:38:06
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000000398