Production Externalities, Congruity of Aggregate Signals, and Optimal Task Assignments

19 Pages Posted: 5 Feb 2005

See all articles by John S. Hughes

John S. Hughes

University of California at Los Angeles

Li Zhang

affiliation not provided to SSRN

James Xie

The Chinese University of Hong Kong

Abstract

In this paper, we consider the role of production externalities in the task assignment problem. Milgrom and Roberts (1992) suggest that complementarities available when agents are assigned to diverse tasks are necessary to overcome distortions in effort allocations caused by an inability to fine tune incentives when agents' compensation is based on aggregate imperfect signals. Our analysis formalizes this intuition in a setting that encompasses externalities under both diverse and similar task assignments.

Keywords: Task Assignments, Incentives, Complementarities, Repetition, Congruity, Effort Allocations

JEL Classification: D82, J41, M54

Suggested Citation

Hughes, John S. and Zhang, Li and Xie, James, Production Externalities, Congruity of Aggregate Signals, and Optimal Task Assignments. Available at SSRN: https://ssrn.com/abstract=661341

John S. Hughes

University of California at Los Angeles ( email )

D410 Anderson Complex
Los Angeles, CA 90095-1481
United States
310-794-9553 (Phone)
310-267-2193 (Fax)

Li Zhang (Contact Author)

affiliation not provided to SSRN

No Address Available

James Xie

The Chinese University of Hong Kong ( email )

Hong Kong
Hong Kong
852 2609 7901 (Phone)
852 2603 5114 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
94
Abstract Views
1,321
rank
304,406
PlumX Metrics