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Delegation and Consultation with Contingent Information

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  • Andrew McGee

Abstract

We study strategic communication between a principal and an agent when both have private information that collectively determines the principal's optimal decision. The principal's possession of decision-relevant information makes the agent uncertain how her report influences the principal's decision. The agent's expectations regarding the principal's information and the relationship between the parties' information affect both the informativeness of communication from the agent and the allocation of decision-making authority when the principal has the option to consult the agent or delegate to her.

Suggested Citation

  • Andrew McGee, 2013. "Delegation and Consultation with Contingent Information," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(2), pages 229-252, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201306)169:2_229:dacwci_2.0.tx_2-o
    DOI: 10.1628/093245613X13606733821557
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    References listed on IDEAS

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    1. Marco Battaglini, 2002. "Multiple Referrals and Multidimensional Cheap Talk," Econometrica, Econometric Society, vol. 70(4), pages 1379-1401, July.
    2. , & ,, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
    3. Epstein, David, 1998. "Partisan and Bipartisan Signaling in Congress," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(2), pages 183-204, October.
    4. Milton Harris & Artur Raviv, 2005. "Allocation of Decision-making Authority," Review of Finance, European Finance Association, vol. 9(3), pages 353-383.
    5. Wouter Dessein, 2002. "Authority and Communication in Organizations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 811-838.
    6. Milton Harris & Artur Raviv, 2005. "Allocation of Decision-making Authority," Review of Finance, Springer, vol. 9(3), pages 353-383, September.
    7. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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    Citations

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    Cited by:

    1. Chiba, Saori & Hori, Kazumi, 2022. "Two-sided strategic information transmission," Games and Economic Behavior, Elsevier, vol. 134(C), pages 229-241.
    2. Murali Agastya & Parimal Kanti Bag & Indranil Chakraborty, 2014. "Communication and authority with a partially informed expert," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 176-197, March.
    3. Garfagnini, Umberto & Ottaviani, Marco & Sørensen, Peter Norman, 2014. "Accept or reject? An organizational perspective," International Journal of Industrial Organization, Elsevier, vol. 34(C), pages 66-74.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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