TY  - RPRT
        AU  - Roider, Andreas
        TI  - Risk, Delegation, and Project Scope
        PY  - 2007/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3117
        UR  - https://www.iza.org/publications/dp3117
        AB  - This paper studies a partial-contracting model where an agent may provide effort to increase a project’s scope before some later decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, we show that only if exogenous risk is sufficiently large, the risk-neutral principal may prefer to delegate authority over decisions to the risk-averse agent. Intuitively, for incentive reasons, the principal may optimally want to allow the agent to reduce his risk exposure. Nevertheless, even endogenous risk may be higher when the risk-averse agent has control.
        KW  - authority
KW  - delegation
KW  - partial contracting
KW  - risk
        ER  -