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 |
| JEL(s): | D86 |
| 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.