Author(s): Maria Sáez-Martí and Anna SjögrenYear: 2008
Title:
Journal of Economic Theory
Volume (No.): 143 (1)
Pages: 153–176
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.
Reference:
Sáez-Martí, Maria and Anna Sjögren (2008),
"Deadlines and Distractions".
Journal of Economic Theory
143(1),
153–176.