|Englmaier, Florian (2011): Commitment in R&D tournaments via strategic delegation to overoptimistic managers. In: Managerial and Decision Economics, Vol. 32, No. 1: pp. 63-69|
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This paper shows that it is profitable for a firm to hire an overoptimistic manager to commit to a certain investment strategy in an R&D tournament situation. In the unique symmetric equilibrium, all firms delegate to overoptimistic managers, where the optimal degree of overoptimism depends on the riskiness of the tournament. In these situations a manager's type may serve as a substitute for delegation via contracts. By delegating to overoptimistic managers, firms can escape the rat race nature of R&D tournaments. Copyright © 2010 John Wiley & Sons, Ltd.
Economics > Chairs > Seminar for Organizational Economics
|Subjects:||300 Social sciences > 330 Economics|
|Deposited On:||28. Nov 2014 14:09|
|Last Modified:||02. Dec 2014 15:23|
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Commitment in R&D Tournaments via Strategic Delegation to Overoptimistic Managers. (deposited 10. Jul 2012 13:06)
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