Research Details

Abstract

We study the interaction between a group of agents who exert effort to complete a project and a manager who chooses its objectives. The manager has limited commitment power so that she can commit to the objectives only when the project is sufficiently close to completion. We show that the manager has incentives to extend the project as it progresses. This result has two implications. First, the manager will choose a larger project if she has less commitment power. Second, the manager should delegate the decision rights over the project size to the agents unless she has sufficient commitment power.

Type

Article

Author(s)

George Georgiadis, Steven Lippman, Christopher S. Tang

Date Published

2014

Citations

Georgiadis, George, Steven Lippman, and Christopher S. Tang. 2014. Project Design with Limited Commitment and Teams. RAND Journal of Economics.(3): 1-26.