Job design with sequential tasks and outcome externalities revisited

Jiancai Pi

Economics Letters, 2014, vol. 125, issue 2, 274-277

Abstract: We revisit job design with sequential tasks and outcome externalities from a different perspective, extending Schmitz (2013a). When two sequential tasks need to be performed by wealth-constrained agents, the principal can hire only one agent or two different agents. When there exists an outcome externality in terms of the fixed cost and such an externality is not too large, if the two tasks are conflicting (resp. synergistic), then it is optimal for the principal to hire two different agents (resp. only one agent). When there exists an outcome externality regarding the marginal cost, the opposite result holds.

Keywords: Moral hazard; Limited liability; Job design; Sequential actions; Conflicting tasks; Outcome externalities (search for similar items in EconPapers)
JEL-codes: D86 J33 L23 M54 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:125:y:2014:i:2:p:274-277

DOI: 10.1016/j.econlet.2014.09.023

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