Header

UZH-Logo

Maintenance Infos

Delegation and value creation


Nüesch, Stephan (2013). Delegation and value creation. University of Konstanz, Working Paper Series 13, University of Zurich.

Abstract

Many  scholars  argue  that  the  delegation  of  decision  rights  to  independent  institutions  promotes trust and specific investments. We test this conjecture with variations of the trust game in which the back transfer decision is delegated to a third party. A randomly chosen third  party  with  a  fixed  payment  induces  larger  investments  over  time  although  the  experimental design rules out reputation building. Changes in the third party’s selection procedure  eliminate  this  benefit.  If  the  third  party  gets  a  reward  for  the  appointment,  delegation actually destroys trust. Investors (unwarrantedly) fear a diffusion of responsibility and lower back transfers in this case.

Abstract

Many  scholars  argue  that  the  delegation  of  decision  rights  to  independent  institutions  promotes trust and specific investments. We test this conjecture with variations of the trust game in which the back transfer decision is delegated to a third party. A randomly chosen third  party  with  a  fixed  payment  induces  larger  investments  over  time  although  the  experimental design rules out reputation building. Changes in the third party’s selection procedure  eliminate  this  benefit.  If  the  third  party  gets  a  reward  for  the  appointment,  delegation actually destroys trust. Investors (unwarrantedly) fear a diffusion of responsibility and lower back transfers in this case.

Statistics

Downloads

3 downloads since deposited on 10 Sep 2019
3 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:10 Sep 2019 13:31
Last Modified:25 Sep 2019 00:45
Series Name:University of Konstanz, Working Paper Series
Number of Pages:38
OA Status:Green
Other Identification Number:merlin-id:8675

Download

Green Open Access

Download PDF  'Delegation and value creation'.
Preview
Content: Published Version
Filetype: PDF
Size: 821kB