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Relational Contracts and Job Design

34 Pages Posted: 1 Dec 2005  

Anja Schöttner

University of Konstanz

Date Written: July 5, 2006


This paper analyzes optimal job design in a repeated principal-agent relationship when there is only one contractible and imperfect performance measure for three tasks whose contribution to firm value is non-verifiable. The tasks can be assigned to either one or two agents. Assigning an additional task to an agent strengthens his relational contract. Therefore, broad task assignments are optimal when the performance measure strongly distorts incentives for the two-task job. This is more likely to be the case if these two tasks are substitutes.

Keywords: job design, multi-tasking, relational contracts

JEL Classification: M51, M54

Suggested Citation

Schöttner, Anja, Relational Contracts and Job Design (July 5, 2006). Available at SSRN: or

Anja Schöttner (Contact Author)

University of Konstanz ( email )

Fach D-144
Universitätsstraße 10
Konstanz, D-78457

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