IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v125y2014i2p274-277.html
   My bibliography  Save this article

Job design with sequential tasks and outcome externalities revisited

Author

Listed:
  • Pi, Jiancai

Abstract

We revisit job design with sequential tasks and outcome externalities from a different perspective, extending Schmitz (2013a). When two sequential tasks need to be performed by wealth-constrained agents, the principal can hire only one agent or two different agents. When there exists an outcome externality in terms of the fixed cost and such an externality is not too large, if the two tasks are conflicting (resp. synergistic), then it is optimal for the principal to hire two different agents (resp. only one agent). When there exists an outcome externality regarding the marginal cost, the opposite result holds.

Suggested Citation

  • Pi, Jiancai, 2014. "Job design with sequential tasks and outcome externalities revisited," Economics Letters, Elsevier, vol. 125(2), pages 274-277.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:2:p:274-277
    DOI: 10.1016/j.econlet.2014.09.023
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016517651400367X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2014.09.023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, April.
    2. Schmitz, Patrick W., 2013. "Public procurement in times of crisis: The bundling decision reconsidered," Economics Letters, Elsevier, vol. 121(3), pages 533-536.
    3. Innes, Robert D., 1990. "Limited liability and incentive contracting with ex-ante action choices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 45-67, October.
    4. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    5. Hoppe, Eva I. & Kusterer, David J., 2011. "Conflicting tasks and moral hazard: Theory and experimental evidence," European Economic Review, Elsevier, vol. 55(8), pages 1094-1108.
    6. Nieken, Petra & Schmitz, Patrick W., 2012. "Repeated moral hazard and contracts with memory: A laboratory experiment," Games and Economic Behavior, Elsevier, vol. 75(2), pages 1000-1008.
    7. Patrick W. Schmitz, 2005. "Allocating Control in Agency Problems with Limited Liability and Sequential Hidden Actions," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 318-336, Summer.
    8. Susanne Ohlendorf & Patrick W. Schmitz, 2012. "Repeated Moral Hazard And Contracts With Memory: The Case Of Risk‐Neutrality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 433-452, May.
    9. Schmitz, Patrick W., 2013. "Job design with conflicting tasks reconsidered," European Economic Review, Elsevier, vol. 57(C), pages 108-117.
    10. Bin R. Chen & Y. Stephen Chiu, 2013. "Interim Performance Evaluation in Contract Design," Economic Journal, Royal Economic Society, vol. 123, pages 665-698, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Schmitz, Patrick W., 2019. "Incomplete contracts, limited liability, and the optimality of joint ownership," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    2. Müller, Daniel & Schmitz, Patrick W., 2021. "The right to quit work: An efficiency rationale for restricting the freedom of contract," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 653-669.
    3. Müller, Daniel & Schmitz, Patrick W., 2015. "Overdeterrence of repeat offenders when penalties for first-time offenders are restricted," Economics Letters, Elsevier, vol. 129(C), pages 116-120.
    4. Jiancai Pi, 2021. "An investigation of seeming favoritism in public procurement," Manchester School, University of Manchester, vol. 89(1), pages 128-137, January.
    5. Jiancai Pi, 2018. "Another Look at Job Design with Conflicting Tasks," Australian Economic Papers, Wiley Blackwell, vol. 57(4), pages 427-434, December.
    6. Altan, Baṣak, 2019. "Dynamic moral hazard with sequential tasks," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    7. Zhaolin Li & Steven Q. Lu & Jennifer K. Ryan & Daewon Sun, 2021. "Impact of Organizational Structure on Development Strategy under Equity‐Based Incentives," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 984-996, April.
    8. Dahai Li & Huan Wang & Yang Li, 2023. "Incentive Mechanisms for Thermal Power Generation Enterprises with Conflicting Tasks: Electricity Production versus Carbon Emission Reduction," Sustainability, MDPI, vol. 15(13), pages 1-22, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schmitz, Patrick W., 2013. "Job design with conflicting tasks reconsidered," European Economic Review, Elsevier, vol. 57(C), pages 108-117.
    2. Jiancai Pi, 2021. "An investigation of seeming favoritism in public procurement," Manchester School, University of Manchester, vol. 89(1), pages 128-137, January.
    3. Patrick W Schmitz, 2022. "How (Not) to Purchase Novel Goods and Services: Specific Performance Versus at-will Contracts," The Economic Journal, Royal Economic Society, vol. 132(647), pages 2563-2577.
    4. Jiancai Pi, 2018. "Another Look at Job Design with Conflicting Tasks," Australian Economic Papers, Wiley Blackwell, vol. 57(4), pages 427-434, December.
    5. Kräkel, Matthias & Schöttner, Anja, 2016. "Optimal sales force compensation," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 179-195.
    6. Lorens Imhof & Matthias Kräkel, 2016. "Ex post unbalanced tournaments," RAND Journal of Economics, RAND Corporation, vol. 47(1), pages 73-98, February.
    7. Fabio Römeis & Fabian Herweg & Daniel Müller, 2022. "Salience Bias and Overwork," Games, MDPI, vol. 13(1), pages 1-22, January.
    8. Goldlücke, Susanne & Schmitz, Patrick W., 2018. "Pollution claim settlements reconsidered: Hidden information and bounded payments," European Economic Review, Elsevier, vol. 110(C), pages 211-222.
    9. Schmitz, Patrick W., 2023. "Incentivizing research with (un)conditional teaching duties: Punishment or rent extraction?," Economics Letters, Elsevier, vol. 224(C).
    10. Matthias Kräkel, 2017. "Authority and Incentives in Organizations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(2), pages 295-311, April.
    11. Eva I. Hoppe & Patrick W. Schmitz, 2021. "How (Not) to Foster Innovations in Public Infrastructure Projects," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 238-266, January.
    12. Müller, Daniel & Schmitz, Patrick W., 2021. "The right to quit work: An efficiency rationale for restricting the freedom of contract," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 653-669.
    13. Kräkel, Matthias, 2017. "Self-organizing teams," Economics Letters, Elsevier, vol. 159(C), pages 195-197.
    14. Christian Lukas, 2023. "On interim performance evaluations and interdependent period outcomes," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 34(1), pages 67-108, March.
    15. Kräkel, Matthias, 2021. "On the delegation of authority," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 965-981.
    16. Nieken, Petra & Schmitz, Patrick W., 2012. "Repeated moral hazard and contracts with memory: A laboratory experiment," Games and Economic Behavior, Elsevier, vol. 75(2), pages 1000-1008.
    17. Mahmoud Sami Nabi, 2016. "Revisiting equity and debt: access to finance and economic inefficiency," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 63(4), pages 393-429, December.
    18. David Martimort & Stéphane Straub, 2016. "How To Design Infrastructure Contracts In A Warming World: A Critical Appraisal Of Public–Private Partnerships," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(1), pages 61-88, February.
    19. Zhaolin Li & Steven Q. Lu & Jennifer K. Ryan & Daewon Sun, 2021. "Impact of Organizational Structure on Development Strategy under Equity‐Based Incentives," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 984-996, April.
    20. Hoppe, Eva I. & Kusterer, David J., 2011. "Conflicting tasks and moral hazard: Theory and experimental evidence," European Economic Review, Elsevier, vol. 55(8), pages 1094-1108.

    More about this item

    Keywords

    Moral hazard; Limited liability; Job design; Sequential actions; Conflicting tasks; Outcome externalities;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:125:y:2014:i:2:p:274-277. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.