Task assignment under agent loss aversion

Kohei Daido, Kimiyuki Morita, Takeshi Murooka and Hiromasa Ogawa

Economics Letters, 2013, vol. 121, issue 1, 35-38

Abstract: We analyze a task-assignment model in which a principal assigns a task to one of two agents depending on future states. If the agents have concave utility, the principal assigns the task to them contingent on the state. We show that if the agents are loss averse, a state-independent assignment–assigning the task to a single agent in all states–can be optimal even when the principal can write a contingent contract at no cost.

Keywords: Task assignment; Loss aversion; Reference-dependent preferences; State-independent assignment (search for similar items in EconPapers)
JEL-codes: D03 D86 M12 M52 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:1:p:35-38

DOI: 10.1016/j.econlet.2013.06.040

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