Should a Principal Hire One Agent or Two Agents to Perform Two Sequential Tasks?

12 Pages Posted: 25 Aug 2010

See all articles by Patrick W. Schmitz

Patrick W. Schmitz

University of Cologne; Centre for Economic Policy Research (CEPR)

Date Written: September 2010

Abstract

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.

Keywords: conflicting tasks, moral hazard, synergies

JEL Classification: D86

Suggested Citation

Schmitz, Patrick W., Should a Principal Hire One Agent or Two Agents to Perform Two Sequential Tasks? (September 2010). CEPR Discussion Paper No. DP7976. Available at SSRN: https://ssrn.com/abstract=1664907

Patrick W. Schmitz (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://schmitz.uni-koeln.de/index.php?s=mitarbeiter&t=schmitz

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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