Chapter 1: Informational control and organizational design. This essay focuses on organizational issues of allocating authority between an uninformed principal and an informed expert. We show that the established result of Dessein (2002) that delegating decisions to a perfectly informed expert is generally better than communication is reversed if the principal can restrict the precision of the expert's information (without learning its content). We demonstrate that these organizational forms---informational control and delegation---can be either complements or substitutes, depending on the principal's ability to affect the expert's discretion about the set of allowed policies.In particular, a necessary and suAccient condition for this is the feasibility of informative communication. Theorem 3 In the class of all information structures, informational control is payoAc superior to optimal delegation if and only if informativeanbsp;...
|Title||:||Essays on Theory of Information|
|Publisher||:||ProQuest - 2008|