Reference : Delegation and Information Revelation
Scientific journals : Article
Business & economic sciences : Microeconomics
http://hdl.handle.net/2268/41468
Delegation and Information Revelation
English
Gautier, Axel mailto [Université de Liège - ULg > HEC-Ecole de gestion de l'ULg : UER > Economie industrielle >]
Paolini, Dimitri [ > > ]
2007
Journal of Institutional and Theoretical Economics = Zeitschrift für die Gesamte Staatswissenschaft
163
574-597
Yes
International
0932-4569
[en] signaling games ; delegation
[en] This paper analyzes, in a set-up where only the control over actions is contractible, the rationale for delegation. An organization must take two decisions. The payoffs are affected by a random parameter and only the agent knows its realization. If the principal delegates the control over the first decision to the agent, his choice may indicate the information that he possesses. If the principal retains control over the second decision, discovering this information is valuable. Hence, this paper provides a new rationale for delegation: A transfer of control to the informed party can be used to discover the private information. (JEL: D23, D82, L22 , M41)
Researchers
http://hdl.handle.net/2268/41468

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