Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77795
Authors: 
Gil, Ricard
Mondria, Jordi
Year of Publication: 
2011
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Publisher:] Springer [Place:] Heidelberg [Volume:] 2 [Year:] 2011 [Issue:] 3 [Pages:] 335-358
Abstract: 
This paper introduces and studies the role of managerial attention allocation constraints in incentive contracts. We extend the traditional moral-hazard benchmark model with multi-tasking and linear incentive contracts by letting the principal choose the amount of monitoring allocated across tasks. In our model, more attention allocated to a task improves the task contractibility and consequently increases the effort provided by the agent. Our findings show that, even under symmetry, in the presence of increasing returns to scale in either production or monitoring the principal may optimally offer an unbalanced incentive contract while allocating different amounts of attention across tasks. Finally, we comment on the empirical content of our model.
Subjects: 
incentive contracts
attention allocation
rational inattention
monitoring
JEL: 
D86
L14
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article

Files in This Item:
File
Size
306.77 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.