Capital budgeting and delegation1

@inproceedings{Harris1998CapitalBA,
  title={Capital budgeting and delegation1},
  author={Milton Harris and Artur Raviv},
  year={1998}
}
As part of our ongoing research into capital budgeting processes as responses to decentralized information and incentive problems, we focus in this paper on when a level of a managerial hierarchy will delegate the allocation of capital across projects and time to the level below it. In our model, delegation is a way to save on costly investigation of proposed projects. Therefore, it is more extensive the larger are the costs of such investigations. This delegation takes advantage of the fact… CONTINUE READING

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