Successful Opaque Management
47 Pages Posted: 18 Jan 2018 Last revised: 1 Oct 2018
Date Written: January 12, 2018
We compare an agent's expected productivity in a setting where the management informs the agent of the tasks' deadlines (transparent management) to one where the management does not inform the agent of the tasks' deadlines (opaque management). We do so in a stylized model where; 1) in each period, the harder an agent works on a task, the more likely the final completion of the task is, 2) the agent receives a reward if she completes the task, but pays the costs of working, and 3) at a certain period that the agent knows (transparent management) or not (opaque management), an exogenous deadline will suddenly prevent the agent from working any longer on the task. We find that in expectation the agent works strictly harder under opaque than transparent management when the reward for the task completion is high, but not too high. However, we also find that if the agent is a sufficient procrastinator (modeled with time-inconsistent preferences), the scope for opaque management vanishes.
Keywords: Deadline, Information, Productivity, Procrastination
JEL Classification: C72, D72
Suggested Citation: Suggested Citation