Optimal delegation via a strategic intermediary

Delegated Bargaining and Renegotiation

This paper examines the commitment e ect of delegated bargaining when renegotiation of the delegation contract cannot be ruled out. We consider a seller who can either bargain face-to-face with a prospective buyer or hire an intermediary to bargain on her behalf. The intermediary is able to interrupt his negotiation with the buyer to renegotiate the delegation contract. In this model, the time ...

Strategic Delegation: A Review, Theoretical Integration, and Research Agenda

This article reviews the strategic delegation literature and provides a theoretical framework that integrates this perspective into management research. The strategic delegation literature is built on the observation that, under strategic interdependence, delegation of decision making and accompanying actions can serve as commitments that influence competitive interactions with rivals and lead ...

Strategic wage setting, inflation uncertainty and optimal delegation

The paper examines optimal monetary policy delegation in an economy where wages are set strategically by a single economy-wide union whose objectives relate to employment and the real wage. Crucially, the central bank exerts imprecise control over inflation, giving rise to a positive relationship between the mean value of inflation and its variance. In this context, union concerns with regard t...

Commitment in R&D Tournaments via Strategic Delegation to Overoptimistic Managers

Delegation , Worker Compensation , and Strategic Competition

We study interfirm competition on a product market where effort decisions are delegated to the firms’ workers. Intrafirm organization is captured by a principal-multiagent framework where firm owners implement alternative compensation schemes for the workers. We show that the value of delegation as well as the optimal design of the compensation scheme crucially depend on the intensity of compet...