Moritz Mosenhauer

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Current Affiliation: 
University of Glasgow
Fields of interest: 
Organisational Economics, Experimental Finance, Applied Behavioural Economics, Growth
Sayantan Ghosal and Yiannis Vailakis
PhD dissertation title: 
Salience and Management-by-Exception
This paper studies a firm's organisational responses if its agents misevaluate information. If a manager overreacts to unusual events it may desirable for the firm to adopt the management practice management-by-exception. I develop a theoretical framework to study the technique and derive conditions under parsimonious assumptions for when it should be adopted. Moreover, I show how further assumptions can refine the model's predictions. The strategy is implemented by controlling the information which 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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