{"id":158213,"date":"2009-10-01T00:00:00","date_gmt":"2009-10-01T00:00:00","guid":{"rendered":"https:\/\/cm-edgetun.pages.dev\/en-us\/research\/msr-research-item\/free-riding-and-free-labor-in-combinatorial-agency\/"},"modified":"2018-10-16T20:15:13","modified_gmt":"2018-10-17T03:15:13","slug":"free-riding-and-free-labor-in-combinatorial-agency","status":"publish","type":"msr-research-item","link":"https:\/\/cm-edgetun.pages.dev\/en-us\/research\/publication\/free-riding-and-free-labor-in-combinatorial-agency\/","title":{"rendered":"Free-Riding and Free-Labor in Combinatorial Agency"},"content":{"rendered":"<div class=\"asset-content\">\n<p>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&#8217; actions, which are not directly observable by the principal.  In our EC08 paper on Combinatorial Agency we suggest and study a basic \u201ccombinatorial agency\u201d 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&#8217; actions, but we show that it can occur in the hidden-actions setting. We prove that for the family of technologies that exhibit \u201cincreasing returns to scale&#8221; 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.<\/p>\n<\/div>\n<p><!-- .asset-content --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>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&#8217; actions, which are not directly observable by the principal. In our EC08 paper on Combinatorial Agency we suggest and study a basic \u201ccombinatorial agency\u201d model for this [&hellip;]<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"msr-url-field":"","msr-podcast-episode":"","msrModifiedDate":"","msrModifiedDateEnabled":false,"ep_exclude_from_search":false,"_classifai_error":"","msr-author-ordering":null,"msr_publishername":"Springer Verlag","msr_publisher_other":"","msr_booktitle":"","msr_chapter":"","msr_edition":"The 2-nd International Symposium on Algorithmic Game Theory (SAGT)","msr_editors":"","msr_how_published":"","msr_isbn":"","msr_issue":"","msr_journal":"","msr_number":"","msr_organization":"","msr_pages_string":"","msr_page_range_start":"","msr_page_range_end":"","msr_series":"","msr_volume":"","msr_copyright":"","msr_conference_name":"The 2-nd International Symposium on Algorithmic Game Theory 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