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Accept or reject? An organizational perspective

Garfagnini, U, Ottaviani, M and Sørensen, P (2014) Accept or reject? An organizational perspective International Journal of Industrial Organization, 34. pp. 66-74.

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This paper compares the relative performance of different organizational structures for the decision of accepting or rejecting a project of uncertain quality. When the principal is uninformed and relies on the advice of an informed and biased agent, cheap-talk communication is persuasive and it is equivalent to delegation of authority, provided that the agent's bias is small. When the principal has access to additional private information, cheap-talk communication dominates both (conditional) delegation and more democratic organizational arrangements such as voting with unanimous consensus.

Item Type: Article
Subjects : Economics
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Garfagnini, U
Ottaviani, M
Sørensen, P
Date : 12 April 2014
DOI : 10.1016/j.ijindorg.2014.03.004
Copyright Disclaimer : Copyright © 2016 Elsevier B.V. or its licensors or contributors. ScienceDirect® is a registered trademark of Elsevier B.V.
Uncontrolled Keywords : Information, Cheap talk, Delegation, Voting
Related URLs :
Depositing User : Symplectic Elements
Date Deposited : 17 May 2016 11:03
Last Modified : 17 May 2016 11:03

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