Volume 5814 of the series Lecture Notes in Computer Science pp 109-121
Free-Riding and Free-Labor in Combinatorial Agency
- Moshe BabaioffAffiliated withMicrosoft Research - Silicon Valley
- , Michal FeldmanAffiliated withSchool of Business Administration, Hebrew University of Jerusalem
- , Noam NisanAffiliated withSchool of Computer Science, Hebrew University of Jerusalem
Abstract
This paper studies a setting where a principal needs to motivate teams of agents whose efforts lead to an outcome that stochastically depends on the combination of agents’ actions, which are not directly observable by the principal. In [1] we suggest and study a basic “combinatorial agency” model for this setting. In this paper we expose a somewhat surprising phenomenon found in this setting: cases where the principal can gain by asking agents to reduce their effort level, even when this increased effort comes for free. This phenomenon cannot occur in a setting where the principal can observe the agents’ actions, but we show that it can occur in the hidden-actions setting. We prove that for the family of technologies that exhibit “increasing returns to scale” this phenomenon cannot happen, and that in some sense this is a maximal family of technologies for which the phenomenon cannot occur. Finally, we relate our results to a basic question in production design in firms.
- Title
- Free-Riding and Free-Labor in Combinatorial Agency
- Book Title
- Algorithmic Game Theory
- Book Subtitle
- Second International Symposium, SAGT 2009, Paphos, Cyprus, October 18-20, 2009. Proceedings
- Pages
- pp 109-121
- Copyright
- 2009
- DOI
- 10.1007/978-3-642-04645-2_11
- Print ISBN
- 978-3-642-04644-5
- Online ISBN
- 978-3-642-04645-2
- Series Title
- Lecture Notes in Computer Science
- Series Volume
- 5814
- Series ISSN
- 0302-9743
- Publisher
- Springer Berlin Heidelberg
- Copyright Holder
- Springer-Verlag Berlin Heidelberg
- Additional Links
- Topics
- Industry Sectors
- eBook Packages
- Editors
-
- Marios Mavronicolas (16)
- Vicky G. Papadopoulou (17)
- Editor Affiliations
-
- 16. Department of Computer Science, University of Cyprus
- 17. Department of Computer Science and Engineering, European University Cyprus
- Authors
-
- Moshe Babaioff (18)
- Michal Feldman (19)
- Noam Nisan (20)
- Author Affiliations
-
- 18. Microsoft Research - Silicon Valley,
- 19. School of Business Administration, Hebrew University of Jerusalem,
- 20. School of Computer Science, Hebrew University of Jerusalem,
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