Decision rules and information provision : monitoring vs manipulation

• Autor(a) principal: Iossa, Elisabetta
• Data de Publicação: 2001
• Outros Autores: Palumbo, Giuliana
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
• Texto Completo: http://hdl.handle.net/10438/12590
• topic: Discretion; Information provision; Manipulation; Monitoring; Rules; Economia; Processo decisório - Modelos econométricos; Econometria

We analyze the contractual design problem of a principal who delegates decision-making and information provision. The principal faces two tasks: he has to decide the level of discretion to be granted to the decision-maker and to establish who is in charge of supplying the information. We show that these two choices are intrinsically related. When the decision-maker is granted high discretion, information provision is optimally delegated to the parties directly affected by the decision. Conversely, when the decision-maker enjoys little discretion, it is more desirable to rely on a third impartial agent. The paper helps rationalize some organizational arrangements that are commonly observed in the context of judicial and antitrust decision-making.