Spatial models of delegation
By: BENDOR, Jonathan; MEIROWITZ, Adam
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ArticlePublisher: New York : Cambridge University Press, May 2004American Political Science Review 98, 2, p. 293-310Abstract: Although a large literature on delegation exists, few models have pushed beyond a core set of canonical assumptions. This approach may be justified on grounds of tractability, but the failure to grasp the significance of different assumptions and pushed beyond specific models has limited our understanding of the incentives for delegation. Consequently, the justifications for delegation that have received recent scrutiny and testing differ from some of the more plausible justifications offered by informal studies of delegation. We show that surprisingly few results in the literature hinge on risk aversion, and surprisingly many turn on the ignored, though equally canonical, technological assumption that uncertainty is fixed (relative to policies). Relaxing the key assumptions about dimensionality and functional forms provides a clearer intuition about delegation - one that is closer to classical treatments. The theory allows us to relate different institutional features (commitment, specialization costs, monitoring, multiple principals) to delegation´s observable properties.
Although a large literature on delegation exists, few models have pushed beyond a core set of canonical assumptions. This approach may be justified on grounds of tractability, but the failure to grasp the significance of different assumptions and pushed beyond specific models has limited our understanding of the incentives for delegation. Consequently, the justifications for delegation that have received recent scrutiny and testing differ from some of the more plausible justifications offered by informal studies of delegation. We show that surprisingly few results in the literature hinge on risk aversion, and surprisingly many turn on the ignored, though equally canonical, technological assumption that uncertainty is fixed (relative to policies). Relaxing the key assumptions about dimensionality and functional forms provides a clearer intuition about delegation - one that is closer to classical treatments. The theory allows us to relate different institutional features (commitment, specialization costs, monitoring, multiple principals) to delegation´s observable properties.
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