The Organization of Expertise in the Presence of Communication

22 Pages Posted: 15 Dec 2009

See all articles by Flavia Roldan

Flavia Roldan

Public-Private Sector Research Center, IESE Business

Multiple version iconThere are 2 versions of this paper

Date Written: November 30, 2009

Abstract

A decision-maker has to elicit information from multiple informed experts about a policy's value. The principal may prevent communication among agents. However, it may be in the principal's interest to allow communication among them. I assume that communication allows some synergies among experts to emerge 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 principal's point of view, when the advantages of the synergy's effects prevail over the collusion problem, communication dominates no communication. However, this will be always true, when the principal allows agents to communicate with each other before they make their effort choices instead of after.

Keywords: information acquisition, communication, coordination, collusion, expertise, organization

JEL Classification: D81, D82, L23

Suggested Citation

Roldan, Flavia, The Organization of Expertise in the Presence of Communication (November 30, 2009). Available at SSRN: https://ssrn.com/abstract=1522099 or http://dx.doi.org/10.2139/ssrn.1522099

Flavia Roldan (Contact Author)

Public-Private Sector Research Center, IESE Business ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

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