Limited Intertemporal Commitment and Job Design

Center for Economic Studies Working Paper at University of Munich, Number 77

Posted: 2 Sep 1999

See all articles by Trond E. Olsen

Trond E. Olsen

Norwegian School of Economics (NHH) - Department of Business and Management Science; CESifo (Center for Economic Studies and Ifo Institute)

Gaute Torsvik

University of Bergen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: December 1994

Abstract

Should workers be given jobs where they have joint responsibility for tasks, or should tasks be separated into different jobs with individual responsibility? Or, if there are more tasks than workers, how should tasks optimally be grouped together? And to what extent should workers be allowed to pursue outside activities while they are at work? Recent work has demonstrated that when the various tasks are substitutes for the worker, static incentive considerations yield the following answers: Separate tasks, and if that is not possible, group together tasks with the same possibility of performance evaluation. Moreover, workers should be given more discretion to pursue outside activities the easier it is to measure their performance on the workplace activity. We show that if a principal who faces an intertemporal commitment problem in her motivation of workers follows these advices, then the negative consequences of the commitment problem are reinforced. More generally, we inquire about optimal job design in an intertemporal agency model, and we find that the answers may be quite different from those obtained on the basis of a static model.

JEL Classification: L2

Suggested Citation

Olsen, Trond E. and Torsvik, Gaute, Limited Intertemporal Commitment and Job Design (December 1994). Center for Economic Studies Working Paper at University of Munich, Number 77. Available at SSRN: https://ssrn.com/abstract=6061

Trond E. Olsen (Contact Author)

Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )

Helleveien 30
N-5045 Bergen
Norway
+47 55 95 99 76 (Phone)
+47 55 95 96 50 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Gaute Torsvik

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway
55589225 (Phone)
55589210 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Register to save articles to
your library

Register

Paper statistics

Abstract Views
666
PlumX Metrics