Supplementary Appendix to 'A Delegation-Based Theory of Expertise'

15 Pages Posted: 18 Sep 2015 Last revised: 5 Apr 2018

See all articles by Attila Ambrus

Attila Ambrus

Duke University - Department of Economics

Volodymyr Baranovskyi

Duke University, Department of Economics, Students

Aaron Kolb

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Date Written: February 8, 2018

Abstract

This supplement provides welfare results not contained in the main text and a proof of Lemma A.1. For small bonuses, a mixed equilibrium exists if and only if a max equilibrium exists; if so, it is unique. For large bonuses, we find a unique candidate for mixed equilibrium and show that mixed and min equilibria cannot co-exist. Also, we give an example for equal biases, where this candidate is indeed a mixed equilibrium. However, when biases are different enough and the bonus is high, a mixed equilibrium does not exist. Though a general analytical comparison is infeasible, we show that mixed equilibria are inferior to min equilibrium or simple delegation in various special cases.

Suggested Citation

Ambrus, Attila and Baranovskyi, Volodymyr and Kolb, Aaron, Supplementary Appendix to 'A Delegation-Based Theory of Expertise' (February 8, 2018). Economic Research Initiatives at Duke (ERID) Working Paper No. 194. Available at SSRN: https://ssrn.com/abstract=2662223 or http://dx.doi.org/10.2139/ssrn.2662223

Attila Ambrus (Contact Author)

Duke University - Department of Economics ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Volodymyr Baranovskyi

Duke University, Department of Economics, Students ( email )

Durham, NC
United States

Aaron Kolb

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States

HOME PAGE: http://https://sites.google.com/site/aaronmkolb/

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