We explore the optimal delegation of decision rights by a principal to a better informed but biased agent. In an infinitely repeated game a long lived principal faces a series of short lived agents. Every period they play a cheap talk game ala Crawford and Sobel (1982) with constant bias,...

I develop a property rights theory of the firm in which managers bargain over the sharing of quasirents in the presence of private information. I analyze the interdependence between the ownership structure of firms and the bargaining inefficiency that is due to the presence of private...

We examine the relationship between the organization of a firm and its ability to adapt to changes in the environment. We show that even if lower-level managers have superior information about their local conditions, and incentive conflicts are negligible, a centralized organization can be...