Arbeitspapier
Risk, delegation, and project scope
This paper studies a partial-contracting model where an agent may provide effort to increase a project's scope before some later decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, we show that only if exogenous risk is sufficiently large, the risk-neutral principal may prefer to delegate authority over decisions to the risk-averse agent. Intuitively, for incentive reasons, the principal may optimally want to allow the agent to reduce his risk exposure. Nevertheless, even endogenous risk may be higher when the risk-averse agent has control.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 3117
- Classification
-
Wirtschaft
- Subject
-
Delegation
authority
risk
partial contracting
Kooperative Führung
Agency Theory
Risiko
Unvollständiger Vertrag
Zeitökonomik
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Roider, Andreas
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2007
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Roider, Andreas
- Institute for the Study of Labor (IZA)
Time of origin
- 2007
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