Job design with conflicting tasks reconsidered

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Abstract

A principal wants two sequential tasks to be performed by wealth-constrained agents. Suppose that there is an outcome externality; i.e., a first-stage success can make second-stage effort more or less effective. If the tasks are conflicting, the principal's profit-maximizing way to induce high efforts is to hire one agent to perform both tasks (so that the prospect to get a larger second-stage rent after a first-stage success motivates the agent to work hard in the first stage). In contrast, when there is an effort externality (i.e., first-stage effort reduces or increases the probability of a second-stage success), then the principal prefers to hire two agents whenever the tasks are conflicting. © 2012 Elsevier B.V.

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APA

Schmitz, P. W. (2013). Job design with conflicting tasks reconsidered. European Economic Review, 57, 108–117. https://doi.org/10.1016/j.euroecorev.2012.11.001

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