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A Multitask Model Without Any Externalities

Meg Sato () and Kazuya Kamiya
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Meg Sato: The Australian National University (ANU) - Crawford School of Public Policy

Crawford School Research Papers from Crawford School of Public Policy, The Australian National University

Abstract: This paper shows that offering a fixed wage maximizes the principal's welfare when the agent needs to engage in multitask and that the effort needed to achieve one task can be induced by suppressing the effort needed for the other task, in the absence of externalities. In the existing literature, it is argued that these results are obtained because externalities exist between the costs of tasks or production of tasks. The former is typically represented by a perfect substitute in the cost function. In this paper, we demonstrate that if the agent is engaged in multitask in which one task produces verifiable output and the other task produces unverifiable output, the same results are obtained without externalities.

Keywords: Multitask; Unverifiable Outputs; Unverifiable Investments (search for similar items in EconPapers)
JEL-codes: D86 J41 J31 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2011-07
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:een:crwfrp:1106

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