Procrastination and projects

Philipp Külpmann

No 544, Center for Mathematical Economics Working Papers from Center for Mathematical Economics, Bielefeld University

Abstract: In this paper I analyze a dynamic moral hazard problem in teams with imperfect monitoring in continuous time. In the model, players are working together to achieve a breakthrough in a project while facing a deadline. The effort needed to achieve such a breakthrough is unknown but players have a common prior about its distribution. Each player is only able to observe their own effort, not the effort of others. I characterize the optimal effort path for general distributions of breakthrough efforts and show that, in addition to free-riding, procrastination arises. Furthermore, in this model, procrastination is not a result of irrational behavior and is even present in the welfare-maximizing solution.

Keywords: Moral hazard in teams; Public good provision; Procrastination (search for similar items in EconPapers)
Pages: 31
Date: 2015-07-29
New Economics Papers: this item is included in nep-cdm, nep-hrm, nep-mic and nep-ppm
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https://pub.uni-bielefeld.de/download/2764730/2764733 First Version, 2015 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:bie:wpaper:544

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