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Deadlines and distractions


Sáez-Martí, María; Sjögren, Anna (2008). Deadlines and distractions. Journal of Economic Theory, 143(1):153-176.

Abstract

We consider a task, demanding a sequence of efforts, that must be completed by a deadline. Effort is not contractible. Agents face shocks to their opportunity cost of time and are sometimes distracted from work. We show that agents who are often distracted may outperform agents who are distracted less often. The reason is that anticipation of distractions induces agents to start earlier for precautionary reasons. Principals can increase the probability of completion, and achieve higher profits, by strategically setting “tight” deadlines, provided that the deadlines can be extended with some positive probability.

We consider a task, demanding a sequence of efforts, that must be completed by a deadline. Effort is not contractible. Agents face shocks to their opportunity cost of time and are sometimes distracted from work. We show that agents who are often distracted may outperform agents who are distracted less often. The reason is that anticipation of distractions induces agents to start earlier for precautionary reasons. Principals can increase the probability of completion, and achieve higher profits, by strategically setting “tight” deadlines, provided that the deadlines can be extended with some positive probability.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:Deadlines, time-consistency, timing of effort, optimal incentives
Language:English
Date:November 2008
Deposited On:20 May 2015 12:43
Last Modified:05 Apr 2016 19:15
Publisher:Elsevier
ISSN:0022-0531
Publisher DOI:https://doi.org/10.1016/j.jet.2008.02.005
Related URLs:http://dx.doi.org/10.5167/uzh-52301

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