Abstract
We consider an incomplete contracting model in which the decision process consists of advice, choice, and execution. Each party has an imperfectly informative private signal on the promising project and the execution of the project is costly. The revelation of the principal's signal through her project choice may discourage the agent's costly execution by denting his confidence that the project is promising. Rubber-stamping the agent's advice about the project choice allows the principal to avoid discouragement. However, because of the agent's learning motive, he may be intentionally silent to prompt the principal to reveal her private signal through the project choice. The agent's strategic silence may prevent informal delegation even when the principal has no incentive to overturn the agent's advice.
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