Optimal Job Design in the Presence of Implicit Contracts

Arijit Mukherjee, Luís Vasconcelos

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)

Abstract

We characterize the optimal job design in a multitasking environment when the firms use implicit contracts (i.e., bonus payments). Two natural forms of job design are compared: (i) individual assignment, where each agent is assigned to a particular job and (ii) team assignment, where a group of agents share responsibility for a job and are jointly accountable for its outcome. Team assignment mitigates the multitasking problem but may weaken the implicit contracts. The optimal job design follows a cutoff rule where only the firms with high reputation concerns opt for team assignment. However, the cutoff rule need not hold if the firm can combine implicit incentives with explicit pay-per-performance contracts.
Original languageEnglish
Pages (from-to)44-69
JournalRand Journal Of Economics
Volume42
Issue number1
DOIs
Publication statusPublished - 1 Jan 2011

Fingerprint Dive into the research topics of 'Optimal Job Design in the Presence of Implicit Contracts'. Together they form a unique fingerprint.

Cite this