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October 24, 2019 | 12:30 p.m. - 2:00 p.m.
Category: Seminar
Location: Faculty/Administration #4339 | Map
656 W. Kirby
Detroit, MI 48202
Cost: Free
Audience: Current Graduate Students, Current Undergraduate Students, Faculty

Dongsoo Shin

Department of Economics

Leavy School of Business

Santa Clara University

 

Abstract:

We study an organization with a top management (principal) and multiple subunits (agents) with private information that determines the organization's aggregate efficiency. Under centralization, eliciting the agents' private information may induce the principal to manipulate aggregate information, which obstructs an effective use of information for the organization. Under delegation, the principal concedes more information rent, but is able to use the agents' information more effectively. The trade-off between the organizational structures depends on the likelihood that the agents are efficient. Centralization is optimal when such likelihood is low. Delegation, by contrast, is optimal when it is high.

For more information about this event, please contact Shooshan Danagoulian at 313-577-1078 or fr4523@wayne.edu.