Delegation of Authority as an Optimal ( In ) complete Contract

@inproceedings{Roider2003DelegationOA,
  title={Delegation of Authority as an Optimal ( In ) complete Contract},
  author={Andreas Roider},
  year={2003}
}
Delegation of Authority as an Optimal (In)complete Contract The present paper aims to contribute to the literature on the foundations of incomplete contracts by providing conditions under which simple delegation of authority is the solution to the complete-contracting problem of the parties. We consider a hold-up framework where both parties profit from an investment that raises the value of an asset. Delegation turns out to be optimal if (i) the decision-dependent parts of the payoffs of the… CONTINUE READING

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