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Journal of Law, Economics, and Organization Advance Access originally published online on September 7, 2006
Journal of Law, Economics, and Organization 2007 23(3):731-742; doi:10.1093/jleo/ewm020
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© The Author 2006. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Motivating Through Delegating Tasks or Giving Attention

Otto H. Swank*

Erasmus University Rotterdam and Tinbergen Institute

Bauke Visser**

Erasmus University Rotterdam

* Erasmus University Rotterdam and Tinbergen Institute.Email: swank{at}few.eur.nl.

** Erasmus University Rotterdam. Email: bvisser{at}few.eur.nl.

An important role of managers is to motivate subordinates. Monetary rewards have been the focus of economic analysis. Managers also use other means to influence subordinates. If a manager can better assess the subordinate's ability than the subordinate himself, and if ability and effort are complements, the manager finds it hard not to overstate a junior's ability. Talk is cheap. We analyze under what conditions a manager can use organizational practices such as delegation and the selective provision of attention to credibly communicate his assessment. We compare their desirability. Delegation is preferable in case the manager's assessment is fairly accurate; attention is inescapable if it is inaccurate.


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