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Giving Advice Versus Making Decisions: Transparency, Information, and Delegation

Published online by Cambridge University Press:  29 April 2018

Sean Gailmard  and
John W. Patty
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Abstract

We generalize standard delegation models to consider policymaking when both information and authority are dispersed among multiple actors. In our theory, the principal may delegate partial authority to a privately informed agent while also reserving some authority for the principal’s use after observing the agent’s decision. Counterintuitively, the equilibrium amount of authority delegated to the agent is increasing in the preference divergence between the principal and agent. We also show that the amount of authority delegated depends upon whether the agent can observe the principal’s own private information (a condition we refer to as “top-down transparency”): this form of transparency increases the authority that must be delegated to the agent to obtain truthful policymaking. Accordingly, such transparency can result in less-informed policymaking. Nonetheless, the principal will sometimes but not always voluntarily choose such transparency.

Type
Original Articles
Information
Political Science Research and Methods , Volume 7 , Issue 3 , July 2019 , pp. 471 - 488
Copyright
© The European Political Science Association 2018 

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Footnotes

*

Sean Gailmard is a Professor in the Charles & Louise Travers Department of Political Science, University of California, 210 Barrows Hall #1950, Berkeley, CA 94720-1950 ([email protected]). John W. Patty is a Professor in the Department of Political Science, University of Chicago, 5828 S. University Avenue, Chicago, IL 60637 ([email protected]). The authors gratefully acknowledge multiple helpful conversations with Maggie Penn and feedback from seminar audiences at the University of Chicago, University of Pittsburgh, University of Michigan, New York University, and Washington University in St Louis. All remaining errors are the authors’ own. To view supplementary material for this article, please visit https://doi.org/10.1017/psrm.2018.5

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