Moritz Mosenhauer

interaction seminar

Moritz Mosenhauer

University of Glasgow
Salience and management-by-exception

IBD Salle 16

Îlot Bernard du Bois - Salle 16

5-9 boulevard Maurice Bourdet
13001 Marseille

Jeudi 28 mars 2019| 12:00 - 13:15

Mathieu Faure : mathieu.faure[at]
Gaëtan Fournier : gaetan.fournier[at]


This paper studies a firm's organisational responses if its agents misevaluate information. If a manager overreacts to unusual events, it may be desirable for the firm to adopt the management practice management-by-exception. I develop a theoretical framework to study this technique and derive conditions under parsimonious assumptions for when it should be adopted. Moreover, I show how further assumptions can re fine the model's predictions, establishing a direct link between the manager's overresponsiveness and organisational rigidity. The strategy is implemented by controlling the information that the manager receives. In fact, in the absence of information transmission and processing costs, it may be optimal to not send inherently valuable signals concerning the economy's state to the manager.

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