Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Optimal incentives for sequential production processes
AU - Winter, E.
PY - 2006/6
Y1 - 2006/6
N2 - 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.
AB - 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.
U2 - 10.1111/j.1756-2171.2006.tb00021.x
DO - 10.1111/j.1756-2171.2006.tb00021.x
M3 - Journal article
VL - 37
SP - 376
EP - 390
JO - RAND Journal of Economics
JF - RAND Journal of Economics
SN - 0741-6261
IS - 2
ER -