On Delegation under Relational Contracts
نویسنده
چکیده
In this paper, a principals decision between delegating two tasks or handling one of the two tasks herself is analyzed. We assume that the principal uses both, formal contracts and informal agreements sustained by the value of future relationships (relational contracts) as incentive device. It is found that the principal is less likely to delegate both tasks in a dynamic setting than in a static one (where formal contracts are the only feasible incentive device), as handling one task herself enables a much wider use of relational contracts. Key words: Job design, relational contracts, formal contracts, delegation. JEL classi cation: D82, J33, L23, M52, M54 I would like to thank Martin Hellwig, Philipp Kircher, Alexander Koch, Matthias Kräkel, Georg Nöldeke, Urs Schweizer and other seminar participants at Bonn and Vallendar for valuable comments and suggestions. Financial support by the Deutsche Forschungsgemeinschaft (DFG), SFB-TR 15 (Governance and the e¢ ciency of economic systems), is gratefully acknowledged. Oliver Gürtler, Department of Economics, BWL II, University of Bonn, Adenauerallee 24-42, D-53113 Bonn, Germany. Tel.:+49-228-739214, Fax:+49-228-739210; E-mail: [email protected]
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