Abstract
I study how the principal's experience aects the structure and e¢ ciency of decision processes in his organization. Organization-speci…c experience augments the principal's ability to verify recommendations presented to him by his agents and also make it easier for him to gather decision-relevant information. The eects of an increase in these two abilities on the decentralization of decision-making and on the agents' initiative are shown to markedly dier. An increase in the principal's veri…cation ability leads to an increase in the share of the decisions made by the agent and to an increase in his initiative and is unambiguously bene…cial. In contrast, an increase in the principal's ability to gather information tends to lead to a larger share of the decisions made by the principal and discourages the agent's initiative.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
