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Procrastination and projects

Author

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  • Külpmann, Philipp

    (Center for Mathematical Economics, Bielefeld University)

Abstract

In this paper I analyze a dynamic moral hazard problem in teams with imperfect monitoring in continuous time. In the model, players are working together to achieve a breakthrough in a project while facing a deadline. The effort needed to achieve such a breakthrough is unknown but players have a common prior about its distribution. Each player is only able to observe their own effort, not the effort of others. I characterize the optimal effort path for general distributions of breakthrough efforts and show that, in addition to free-riding, procrastination arises. Furthermore, in this model, procrastination is not a result of irrational behavior and is even present in the welfare-maximizing solution.

Suggested Citation

  • Külpmann, Philipp, 2015. "Procrastination and projects," Center for Mathematical Economics Working Papers 544, Center for Mathematical Economics, Bielefeld University.
    • Handle: RePEc:bie:wpaper:544
    as

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    File URL: https://pub.uni-bielefeld.de/download/2764730/2764733
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    References listed on IDEAS

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