Domain knowledge, ability, and the principal's authority relations

• 成果类型: Article
• 署名作者: Levy, Nadav
• 署名单位: Reichman University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12055
• 发表日期: 2014
• 页码: 370-394
• 关键词: practical intelligence; capital allocation; tacit knowledge; COMMUNICATION; managerial; style

摘要

I consider how different managerial traits affect the authority relation between a principal and his agent. An increase in the principal's domain knowledgewhich enhances his capability to verify the agent's recommendationsleads to an increase in the proportion of the agent's recommendations that are approved, an increase in the agent's initiative, and is unambiguously beneficial to the principal and to the agent. In contrast, an increase in the principal's general ability to explore additional alternatives on his own leads to the principal making a larger proportion of the decisions. This discourages the agent's initiative and can adversely affect the principal.