| Mylovanov, Tymofiy (January 2005): Veto-Based Delegation. SFB/TR 15 Discussion Paper No. 129 |
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Abstract
In a principal-agent model with hidden information and no monetary transfers, I establish the Veto-Power Principle: any incentive-compatible outcome can be implemented through veto-based delegation with an endogenously chosen default decision. This result demonstrates the exact nature of commitment powers required by the principal: (1) to design the default outcome and (2) to ensure that she has almost no formal control over the agent's decisions.
| Item Type: | Paper (Discussion Paper) |
|---|---|
| Keywords: | veto power, asymmetric information, principal-agent relationship, no monetary transfers. |
| Collections: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A5 - Unvollständige Vertragsbeziehungen und die Gestaltung von Residualrechten |
| Subjects: | 300 Social sciences > 330 Economics |
| JEL Classification: | D78, D82, L22, M54 |
| URN: | urn:nbn:de:bvb:19-epub-13422-3 |
| Language: | English |
| ID Code: | 13422 |
| Last Modified: | 10. Jul 2012 13:10 |
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