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Delegation to a Group

Author

Listed:
  • Fehrler, Sebastian

    (University of Bremen)

  • Janas, Moritz

    (University of Konstanz)

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 case of delegation, where 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

  • Fehrler, Sebastian & Janas, Moritz, 2021. "Delegation to a Group," IZA Discussion Papers 14426, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14426
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    References listed on IDEAS

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    More about this item

    Keywords

    group decision-making; committees; decision rights; delegation; expert advice; strategic communication;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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