TY  - RPRT
        AU  - Ratto, Marisa
AU  - Schnedler, Wendelin
        TI  - Division of Labour and Directed Production
        PY  - 2005/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1669
        UR  - https://www.iza.org/publications/dp1669
        AB  - We examine a situation where efforts on different tasks positively affect production but are not separately verifiable and where the manager (principal) and the worker (agent) have different ideas about how production should be carried out: agents prefer a less efficient way of production. We show that by dividing labour (assigning tasks to different agents and verifying that agents do not carry out tasks to which they are not assigned), it is possible for the principal to implement the efficient way of production. Colluding agents can undermine this implementation. However, if agents have different abilities, collusion can be prevented by a specific assignment of agents to tasks.
        KW  - specialisation
KW  - moral hazard
KW  - hidden action
KW  - job design
        ER  -