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Optimal Task Design: To Integrate or Separate Planning and Implementation ?
Author(s) -
Khalil Fahad,
Kim Doyoung,
Shin Dongsoo
Publication year - 2006
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2006.00107.x
Subject(s) - task (project management) , constraint (computer aided design) , computer science , outcome (game theory) , value (mathematics) , value of information , artificial intelligence , machine learning , systems engineering , microeconomics , mathematics , engineering , geometry , economics
Integrating planning and implementation, by having one agent perform both tasks, may be effective in encouraging planning activity whose outcome is not observable. Emphasizing its information‐generating role, we find that planning activity is best encouraged by partially integrating the tasks. This is because the value of information is nonmonotonic in the degree of task integration. Therefore, the threat of using a second agent to implement the project may relax the moral hazard constraint associated with the planning task. The project size is distorted to increase the value of information, and there can be overinvestment relative to the first best.