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Task-specific abilities in multi-task principal-agent relationships

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  • Thiele, Veikko

Abstract

This paper analyzes a multi-task agency framework where the agent exhibits task-specific abilities. It illustrates how incentive contracts account for the agent's task-specific abilities if contractible performance measures do not reflect the agent's multidimensional contribution to firm value. This paper further sheds light on potential ranking criteria for performance measures in multi-task principal-agent relationships. It demonstrates that performance measures in multi-task agencies cannot necessarily be compared by their respective signal-to-noise ratio as in single-task agency relationships. In fact, it is indispensable to take the induced effort distortion and the measure-cost efficiency into consideration--both determined by the agent's task-specific abilities.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 17 (2010)
Issue (Month): 4 (August)
Pages: 690-698

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Handle: RePEc:eee:labeco:v:17:y:2010:i:4:p:690-698

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Task-specific human capital Performance measurement Distortion Multi-task agencies Congruence Incentives;

References

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Citations

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Cited by:
  1. Yann Kossi & Jean-Yves Lesueur & Mareva Sabatier, 2013. "Publish or Teach ? The Role of the Scientific Environment on Academics’ Multitasking," Working Papers 1315, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  2. Meng, Dawen & Tian, Guoqiang, 2013. "Multi-task incentive contract and performance measurement with multidimensional types," Games and Economic Behavior, Elsevier, vol. 77(1), pages 377-404.
  3. Dietrichson, Jens, 2013. "Coordination Incentives, Performance Measurement and Resource Allocation in Public Sector Organizations," Working Papers 2013:26, Lund University, Department of Economics.

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