DP7976 Should a principal hire one agent or two agents to perform two sequential tasks?
|Author(s):||Patrick W. Schmitz|
|Publication Date:||September 2010|
|Keyword(s):||conflicting tasks, moral hazard, synergies|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=7976|
A principal should hire one agent to perform two sequential tasks when the tasks are conflicting (i.e., a first-stage success makes second-stage effort less effective), while she should hire two different agents when the tasks are synergistic.