Asymmetric Information, Incentives and Intrafirm Resource Allocation

  title={Asymmetric Information, Incentives and Intrafirm Resource Allocation},
  author={Milton Harris and Charles H. Kriebel and Artur Raviv},
  journal={Management Science},
This paper considers the question: How should a firm allocate a resource among divisions when the productivity of the resource in each division is known only to the division manager? Obviously if the divisions as represented by their managers are indifferent among various allocations of the resource, the headquarters can simply request the division managers to reveal their private information on productivity knowing that the managers have no incentive to lie. The resource allocation problem can… 
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