Repeated delegation

• 成果类型: Article
• 署名作者: Lipnowski, Elliot; Ramos, Joao
• 署名单位: Columbia University; University of Southern California; University of London; Queen Mary University London
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105040
• 发表日期: 2020
• 关键词: delegation; limited commitment; Repeated game; Capital budgeting

摘要

In an ongoing relationship of delegated decision making, a principal consults a biased agent to assess projects' returns. In equilibrium, the principal allows future bad projects to reward fiscal restraint, but cannot commit to indefinite rewards. We characterize equilibrium payoffs (at fixed discounting), showing that Pareto optimal equilibria are implemented via a two-regime 'Dynamic Capital Budget'. Rather than facing backloaded rewards-as in dynamic agency models with commitment power-the agent loses autonomy as time progresses. (C) 2020 Elsevier Inc. All rights reserved.