Delegation, Risk, and Project Scope

URN to cite this document:: urn:nbn:de:bvb:355-epub-217048
DOI to cite this document:: 10.5283/epub.21704

Roider, Andreas

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Date of publication of this fulltext: 10 Aug 2011 06:16

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Abstract

This paper studies a partial-contracting model where an agent may provide effort to increase a project's scope before some later (operative) decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, only if the exogenous risk is sufficiently large may the risk-neutral principal prefer to delegate ...