Schmitz, Patrick W. (2012): Job design with conflicting tasks reconsidered.
This is the latest version of this item.
Download (155kB) | Preview
A principal wants two sequential tasks to be performed by wealth-constrained agents. Suppose that there is an outcome externality; i.e., a first-stage success can make second-stage effort more or less effective. If the tasks are conflicting, the principal's profit-maximizing way to induce high efforts is to hire one agent to perform both tasks (so that the prospect to get a larger second-stage rent after a first-stage success motivates the agent to work hard in the first stage). In contrast, when there is an effort externality (i.e., first-stage effort reduces or increases the probability of a second-stage success), then the principal prefers to hire two agents whenever the tasks are conflicting.
|Item Type:||MPRA Paper|
|Original Title:||Job design with conflicting tasks reconsidered|
|Keywords:||moral hazard; limited liability; conflicting tasks; synergies|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M12 - Personnel Management; Executive Compensation
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M54 - Labor Management
|Depositing User:||Patrick W. Schmitz|
|Date Deposited:||05. Nov 2012 15:56|
|Last Modified:||26. Feb 2013 04:49|
Bennett, J., Iossa, E., 2006. Building and managing facilities for public services. Journal of Public Economics 90, 2143--2160.
Berkovitch, E., Israel, R., Spiegel, Y., 2010. A double moral hazard model of organization design. Journal of Economics and Management Strategy 19, 55--85.
Besley, T., Case, A., 1995. Does electoral accountability affect economic policy choices? Evidence from gubernatorial term limits. Quarterly Journal of Economics 110, 769--798.
Bolton, P., Dewatripont, M., 2005. Contract Theory. Cambridge, MA: MIT Press.
Chen, B.R., Chiu, Y.S., 2010. Public-private partnerships: Task interdependence and contractibility. International Journal of Industrial Organization 28, 591--603.
Chen, B.R., Chiu, Y.S., 2011. Task interdependence and non-contractibility in public good provision. Discussion Paper.
Dana, J.D., Jr., 1993. The organization and scope of agents: Regulating multiproduct industries. Journal of Economic Theory 59, 288--310.
De Brux, J., Desrieux, C., 2011. Should we fear renegotiations in public-private partnerships? Discussion Paper.
Dewatripont, M., Jewitt, I., Tirole, J., 2000. Multitask agency problems: Focus and task clustering. European Economic Review 44, 869--877.
Dewatripont, M., Tirole, J., 1999. Advocates. Journal of Political Economy 107, 1--39.
Gilbert, R.J., Riordan, M.H., 1995. Regulating complementary products: A comparative institutional analysis. Rand Journal of Economics 26, 243--256.
Grossman, S.J., Hart, O.D., 1986. The costs and benefits of ownership: A theory of vertical and lateral integration. Journal of Political Economy 94, 691--719.
Hart, O.D., 1995. Firms, Contracts and Financial Structure. Oxford: Oxford University Press.
Hart, O., 2003. Incomplete contracts and public ownership: Remarks, and an application to public-private partnerships. Economic Journal 113, C69--C76.
Hart, O.D., Moore, J., 1990. Property rights and the nature of the firm. Journal of Political Economy 98, 1119--1158.
Hart, O., Shleifer, A., Vishny, R.W., 1997. The proper scope of government: Theory and application to prisons. Quarterly Journal of Economics 112, 1127--1161.
Hirao, Y., 1993. Task assignment and agency structures. Journal of Economics and Management Strategy 2, 299--323.
Holmström, B., Milgrom, P., 1991. Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design. Journal of Law, Economics, and Organization 7, 24--52.
Hoppe, E.I., Kusterer, D.J., 2011. Conflicting tasks and moral hazard: Theory and experimental evidence. European Economic Review 55, 1094--1108.
Hoppe, E.I., Schmitz, P.W., 2010. Public versus private ownership: Quantity contracts and the allocation of investment tasks. Journal of Public Economics 94, 258--268.
Hoppe, E.I., Schmitz, P.W., 2012. Public-private partnerships versus traditional procurement: Innovation incentives and information gathering. Rand Journal of Economics, forthcoming.
Innes, R.D., 1990. Limited liability and incentive contracting with ex-ante action choices. Journal of Economic Theory 52, 45--67.
Iossa, E., Martimort, D., 2012. Risk allocation and the costs and benefits of public-private partnerships. Rand Journal of Economics 43, 442--474.
Itoh, H., 1994. Job design, delegation and cooperation: A principal-agent analysis. European Economic Review 38, 691--700.
Khalil, F., Kim, D., Shin, D., 2006. Optimal task design: To integrate or separate planning and implementation? Journal of Economics and Management Strategy 15, 457--478.
Kragl, J., Schöttner, A., 2011. Wage floors and optimal job design. Discussion Paper.
Kräkel, M., Schöttner, A., 2010. Minimum wages and excessive effort supply. Economics Letters 108, 341--344.
Kräkel, M., Schöttner, A., 2011. Internal labor markets and worker rents. Discussion Paper.
Laffont, J.-J., Martimort, D. 2002. The Theory of Incentives: The Principal-Agent Model. Princeton, N.J.: Princeton University Press.
Lewis, T.R., Sappington, D.E.M., 1997. Information management in incentive problems. Journal of Political Economy 105, 796--821.
Martimort, D., Pouyet, J., 2008. To build or not to build: Normative and positive theories of public--private partnerships. International Journal of Industrial Organization 26, 393--411.
Martimort, D., Straub, S., 2012. How to design infrastructure contracts in a warming world? A critical appraisal of public-private partnerships. Discussion Paper.
Müller, D., 2011. Repeated moral hazard revisited. Discussion Paper.
Nieken, P., Schmitz, P.W., 2012. Repeated moral hazard and contracts with memory: A laboratory experiment. Games and Economic Behavior 75, 1000--1008.
Ohlendorf, S., Schmitz, P.W., 2012. Repeated moral hazard and contracts with memory: The case of risk-neutrality. International Economic Review 53, 433--452.
Pitchford, R., 1998. Moral hazard and limited liability: The real effects of contract bargaining. Economics Letters 61, 251--259.
Riordan, M.H., Sappington, D.E.M., 1987. Information, incentives, and organizational mode. Quarterly Journal of Economics 102, 243--263.
Schmitz, P.W., 2005. Allocating control in agency problems with limited liability and sequential hidden actions. Rand Journal of Economics 36, 318--336.
Tirole, J., 1988. The Theory of Industrial Organization. Cambridge: MIT Press.
Tirole, J., 1999. Incomplete contracts: Where do we stand? Econometrica 67, 741--781.
Tirole, J., 2001. Corporate governance. Econometrica 69, 1--35.
Available Versions of this Item
Job design with conflicting tasks reconsidered. (deposited 24. Feb 2012 23:19)
- Job design with conflicting tasks reconsidered. (deposited 05. Nov 2012 15:56) [Currently Displayed]