Access

You are not currently logged in.

Access JSTOR through your library or other institution:

login

Log in through your institution.

Journal Article

Project Assignment Rights and Incentives for Eliciting Ideas

Anil Arya, Jonathan Glover and Bryan R. Routledge
Management Science
Vol. 48, No. 7 (Jul., 2002), pp. 886-899
Published by: INFORMS
Stable URL: http://www.jstor.org/stable/822697
Page Count: 14
Were these topics helpful?
See somethings inaccurate? Let us know!

Select the topics that are inaccurate.

Cancel
  • Download ($30.00)
  • Add to My Lists
  • Cite this Item
Project Assignment Rights and Incentives for Eliciting Ideas
Preview not available

Abstract

In this paper, we study an incentive problem that arises between a principal and two agents because they value a real option differently. The real option in our model is a timing option. The agents have limited capacity to undertake projects, and each agent's capacity can be filled now or later. Because the principal cares about capacity in the aggregate but each agent cares only about his own capacity, the agents assign a higher value to the option to wait. As a result, agents sometimes withhold ideas from the principal. We show that decentralization can be a solution to this problem. Delegating assignment rights to an agent reduces the option value of waiting for the other agent sufficiently that he is willing to reveal his ideas.

Page Thumbnails

  • Thumbnail: Page 
[886]
    [886]
  • Thumbnail: Page 
887
    887
  • Thumbnail: Page 
888
    888
  • Thumbnail: Page 
889
    889
  • Thumbnail: Page 
890
    890
  • Thumbnail: Page 
891
    891
  • Thumbnail: Page 
892
    892
  • Thumbnail: Page 
893
    893
  • Thumbnail: Page 
894
    894
  • Thumbnail: Page 
895
    895
  • Thumbnail: Page 
896
    896
  • Thumbnail: Page 
897
    897
  • Thumbnail: Page 
898
    898
  • Thumbnail: Page 
899
    899