Working Paper
Mechanism design and assignment models
Abstract: This mechanism design paper studies the assignment of people to projects over time. Inability to communicate interim shocks is a force for long-term assignments, though exceptions exist for high risk aversion. In contrast, costless reporting of interim shocks makes switching powerful for virtually all environments. Switching elicits honest reports and mitigates incentive constraints allowing, in particular, beneficial concealment of project quality. Properties of the production technology are also shown to matter. Substitutability of intertemporal effort is a force for long-term assignments while complementarity with Nash equilibrium strategies is a force for job rotation.
Keywords: Production (Economic theory);
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Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Working Paper
Publication Date: 2003
Number: 03-09