By designing a novel experimental, we identify systematic ways in which behavior deviates from economic theory and contribute to the discussion on how firms utilize information. In particular, under delegation prevents firms from exploiting economies that arise from local capabilities and task specialization, and results in forgone profits.
This paper has benefited from helpful insights from Sean Pfeffer, Doug Stevens, Jeremy Lill, Michael Mjerczyk, Ivo Tafkov, Flora Zhou, Stephan Kramer, Nadine Funcke, Paolo Perego, Marcel van Rinsum, and workshop participants at The University of Kentucky, Erasmus University, Georgia State University, and the 2013 Management Accounting Conference. We thank Colorado State University for providing funding for this study.
Coats, J.C. and Rankin, F.W. (2016), "The Delegation of Decision Rights: An Experimental Investigation", Advances in Management Accounting (Advances in Management Accounting, Vol. 27), Emerald Group Publishing Limited, Bingley, pp. 39-71. https://doi.org/10.1108/S1474-787120160000027002
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