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Optimal task assignments

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  • Balmaceda, Felipe

Abstract

This paper studies optimal task assignments in a risk neutral principal-agent model in which agents are compensated according to an aggregated performance measure. The main trade-off is one in which specialization allows the implementation of any possible effort profile, while multitasking constraint the set of implementable effort profiles. Yet, the implementation of any effort profile in this set is less expensive than the equivalent profile under specialization. The principal prefers multitasking to specialization except when tasks are complements and the output after success is small enough so that it is not second-best optimal to implement high effort in each task. This result is robust to several extensions such as the existence of multiple performance measures.

Suggested Citation

  • Balmaceda, Felipe, 2016. "Optimal task assignments," Games and Economic Behavior, Elsevier, vol. 98(C), pages 1-18.
    • Handle: RePEc:eee:gamebe:v:98:y:2016:i:c:p:1-18
    DOI: 10.1016/j.geb.2016.05.002
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    Cited by:

    1. Balmaceda, Felipe, 2018. "Optimal task assignments with loss-averse agents," European Economic Review, Elsevier, vol. 105(C), pages 1-26.
    2. Zhaolin Li & Steven Q. Lu & Jennifer K. Ryan & Daewon Sun, 2021. "Impact of Organizational Structure on Development Strategy under Equity‐Based Incentives," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 984-996, April.
    3. Xu, Minbo & Yin, Nina & Li, Sanxi, 2019. "Multitask assignments with adverse selection," Economics Letters, Elsevier, vol. 181(C), pages 127-132.

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    More about this item

    Keywords

    Moral hazard; Specialization; Multitasking; Supermodularity; Submodularity;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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