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Ability, Openness, and Managerial Decision Making

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  • Lei Wen
  • Haiwen Zhou

Abstract

Impact of the ability and the degree of openness of a manager on decision making is studied. Whether a more able manager increases or decreases the effort of a subordinate depends on the relative quality of information. Greater openness is a two-edged sword: it increases the likelihood that more information will be employed, but it reduces the manager’s incentive to expend effort on obtaining better information. A more open manager is more desirable when the position is relatively more important or the prior information is not very accurate. Copyright International Atlantic Economic Society 2009

Suggested Citation

  • Lei Wen & Haiwen Zhou, 2009. "Ability, Openness, and Managerial Decision Making," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(2), pages 197-208, June.
    • Handle: RePEc:kap:atlecj:v:37:y:2009:i:2:p:197-208
    DOI: 10.1007/s11293-008-9162-6
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    References listed on IDEAS

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    Cited by:

    1. Haiwen Zhou, 2023. "Unification and Division: A Theory of Institutional Choices in Imperial China," Annals of Economics and Finance, Society for AEF, vol. 24(1), pages 13-37, May.

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    More about this item

    Keywords

    Managerial decision making; Bayesian decision making; Ability; Openness; M10;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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