DP6467 Task Scheduling and Moral Hazard
|Author(s):||Tymofiy Mylovanov, Patrick W. Schmitz|
|Publication Date:||September 2007|
|Keyword(s):||hidden actions, Job design, limited liability, task assignment|
|JEL(s):||D86, L23, M54|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=6467|
We study a two-period moral hazard problem with risk-neutral and wealth-constrained agents and three identical tasks. We show that the allocation of tasks over time is important if there is a capacity constraint on the number of tasks that can be performed in one period. We characterize the optimal schedule of tasks over time and the optimal assignment of tasks to agents conditional on the outcomes of previous tasks. In particular, we show that delaying tasks is optimal if and only if the effect of an agent's effort on the probability of success is relatively low.