This paper considers a two-stage sequential investment problem where the principal wishes to cancel the project if it fails in the first stage. Suppose that only the first-stage agent can observe the outcome in the first stage. There are two organizational forms to choose from: integration,...

This paper considers a two-stage sequential investment problem where the principal wishes to cancel the project if it fails in the first stage. Suppose that only the first-stage agent can observe the outcome in the first stage. There are two organizational forms to choose from: integration,...

This paper analyzes the allocation of decision-making authority when the principal has reputation concerns. The principal can either keep the authority, or delegate the authority to the agent, who has better information. An outside evaluator cannot observe who makes the decision. Thus, the...