Deadlines and distractions
We consider a task, demanding a sequence of efforts, that must be completed by a deadline. Effort is not contractible. Agents face shocks to their opportunity cost of time and are sometimes distracted from work. We show that agents who are often distracted may outperform agents who are distracted less often. The reason is that anticipation of distractions induces agents to start earlier for precautionary reasons. Principals can increase the probability of completion, and achieve higher profits, by strategically setting "tight" deadlines, provided that the deadlines can be extended with some positive probability.
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- Ted O'Donoghue & Matthew Rabin, 1999. "Incentives for Procrastinators," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 769-816.
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- Flavio Toxvaerd, 2004.
"Time of the Essence,"
Discussion Paper Series
dp358, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
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"A Theory of Optimal Deadlines,"
Discussion Paper Series
dp357, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
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