Task Scheduling and Moral Hazard

Patrick Schmitz and Tymofiy Mylovanov ()

No 6467, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study a two-period moral hazard problem with risk-neutral and wealth-constrained agents and three identical tasks. We show that the allocation of tasks over time is important if there is a capacity constraint on the number of tasks that can be performed in one period. We characterize the optimal schedule of tasks over time and the optimal assignment of tasks to agents conditional on the outcomes of previous tasks. In particular, we show that delaying tasks is optimal if and only if the effect of an agent's effort on the probability of success is relatively low.

Keywords: Hidden actions; Job design; Limited liability; Task assignment (search for similar items in EconPapers)
JEL-codes: D86 L23 M54 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-bec
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Citations: View citations in EconPapers (2)

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Journal Article: Task scheduling and moral hazard (2008)
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