Optimal Task Design: to integrate or separate planning and implementation?
Abstract"Integrating planning and implementation, by having one agent perform both tasks, may be effective in encouraging planning activity whose outcome is not observable. Emphasizing its information-generating role, we find that planning activity is best encouraged by partially integrating the tasks. This is because the value of information is nonmonotonic in the degree of task integration. Therefore, the threat of using a second agent to implement the project may relax the moral hazard constraint associated with the planning task. The project size is distorted to increase the value of information, and there can be overinvestment relative to the first best." Copyright 2006, The Author(s) Journal Compilation (c) 2006 Blackwell Publishing.
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Bibliographic InfoPaper provided by University of Washington, Department of Economics in its series Working Papers with number UWEC-2003-01-P.
Date of creation: Mar 2006
Date of revision:
Publication status: Published in Journal of Economics and Management Strategy, Volume 14/2, 269-291, 2006
Other versions of this item:
- Fahad Khalil & Doyoung Kim & Dongsoo Shin, 2006. "Optimal Task Design: To Integrate or Separate Planning and Implementation?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(2), pages 457-478, 06.
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