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Delegation to a Group

Author

Listed:
  • Sebastian Fehrler

    (University of Bremen, SOCIUM, 28359 Bremen, Germany; Department of Economics, University of Konstanz, 78457 Konstanz, Germany)

  • Moritz Janas

    (Department of Economics, University of Konstanz, 78457 Konstanz, Germany)

Abstract

We study the choice of a principal to either delegate a decision to a group of careerist experts or to consult them individually and keep the decision-making power. Our model predicts a trade-off between information acquisition and information aggregation . On the one hand, the expected benefit from being informed is larger in case the experts are consulted individually. Hence, the experts either acquire the same or a larger amount of information, depending on the cost of information, than in case of delegation. On the other hand, any acquired information is better aggregated in the case of delegation, in which experts can deliberate secretly. To test the model’s key predictions, we run an experiment. The results from the laboratory confirm the predicted trade-off despite some deviations from theory on the individual level.

Suggested Citation

  • Sebastian Fehrler & Moritz Janas, 2021. "Delegation to a Group," Management Science, INFORMS, vol. 67(6), pages 3714-3743, June.
    • Handle: RePEc:inm:ormnsc:v:67:y:2021:i:6:p:3714-3743
    DOI: 10.1287/mnsc.2020.3665
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    References listed on IDEAS

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