Automation and Task Allocation Under Asymmetric Information

Quitz\'e Valenzuela-Stookey

Papers from arXiv.org

Abstract: A firm can complete the tasks needed to produce output using either machines or workers. Unlike machines, workers have private information about their preferences over tasks. I study how this information asymmetry shapes the mechanism used by the firm to allocate tasks across workers and machines. I identify important qualitative differences between the mechanisms used when information frictions are large versus small. When information frictions are small, tasks are substitutes: automating one task lowers the marginal cost of other tasks and reduces the surplus generated by workers. When frictions are large, tasks can become complements: automation can raise the marginal cost of other tasks and increase the surplus generated by workers. The results extend to a setting with multiple firms competing for workers.

Date: 2025-11
New Economics Papers: this item is included in nep-bec, nep-des and nep-mic
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