Optimal incentives for sequential production processes

Winter, E. (2006) Optimal incentives for sequential production processes. RAND Journal of Economics, 37 (2). pp. 376-390. ISSN 0741-6261

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Abstract

I study optimal incentive schemes in organizations where agents perform their tasks sequentially. I consider a model in which agents ' effort decisions are mapped into the probability of the project 's success. An optimal investment-inducing mechanism allocates rewards to agents so as to induce all of them to exert effort in equilibrium at minimal cost to the principal. I characterize the unique optimal mechanism in several versions of my benchmark model. I also address the problem of allocating individuals with diverse qualifications to different slots of the production process as well as allocating tasks of different importance across different agents. Copyright © 2006, RAND.

Item Type:
Journal Article
Journal or Publication Title:
RAND Journal of Economics
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/2000/2002
Subjects:
ID Code:
126904
Deposited By:
Deposited On:
14 Aug 2018 13:46
Refereed?:
Yes
Published?:
Published
Last Modified:
11 Mar 2020 06:50