This paper studies delegation and communication in a model of three-tier
hierarchy. There is an uninformed principal, and uninformed intermediary, and an
informed agent. Under delegation the principal chooses an interval of actions to delegate
to the intermediary, and the intermediary chooses a sub-interval from that interval
to delegate to the agent. Under communication, the agent communicates with the
intermediary, after which the intermediary communicates with the principal. We characterize
the equilibrium outcomes under delegation and communication. We show that
under delegation the principal can appoint a more biased individual to be the intermediary,
and a less biased individual to be the agent. Furthermore, we demonstrate that
the principal can prefer to communicate with the subordinates rather than delegate
decision rights to them if the intermediary and the agent have opposing biased.

• Transfer of authority within hierarchies