Common and Exclusive Agencies and Partial Delegation
Within the context of common agency, the article examines separation and partial delegation. The first entails breaking the multiple-task agency into smaller single-task agencies, whereas the second allows principals to substitute some of their efforts for the agency's. With respect to the first alternative, it is shown that common agency can be sustained against separation by the presence of strong complements. For the second alternative, principals partially delegate their effort and retain the right to influence agency output at a later stage of the game. Although this tends to weaken agency incentives, principals may prefer this version of common agency than one under full delegation and may prefer it to an exclusive one. Copyright 2007, Oxford University Press.
Volume (Year): 23 (2007)
Issue (Month): 1 (April)
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