How delegation improves commitment

McCallum (1995, American Economic Review Papers and Proceedings 85 (2), 207-211) conjectures that delegation merely relocates the commitment problem but does not solve it. This holds if optimal ex-ante policies do not change if additional information becomes available. However, with a flexibility-credibility trade-off delegation improves credibility.

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Year of publication:	2010
Authors:	Perino, Grischa
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 106.2010, 2, p. 137-139
Publisher:	Elsevier
Subject:	Time-inconsistency Commitment Delegation

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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