IESE Research Papers
No D/835:
The organization of expertise in the presence of communication
Flavia Roldan ()
Abstract: A decision-maker has to elicit information from informed
multiple experts about a policy's value. The principal may prevent
communication among the agents. However, it may be in the principal's
interest to allow communication among them. I assume that communication
allows synergies to emerge among the experts but also opens the possibility
of collusion among them. I study the optimal design of contracts, focusing
on the organization of expertise in the communication phase. I show that,
from the principal's point of view, when the advantage of synergies
prevails over the collusion problem, communication dominates the no
communication case. However, synergies will always prevail if the principal
lets agents communicate with each other before they make their choices
rather than after.
Keywords: information acquisition; communication; coordination; collusion; expertise; organization; (follow links to similar papers)
JEL-Codes: D81; D82; L23; (follow links to similar papers)
24 pages, November 9, 2009
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