Task assignment as dynamic incentives

Abstract

We study repeated task assignment as an instrument for providing effort incentives. Unlike traditional incentive instruments, assignment of a task both determines who produces and provides incentives, and incentives for one worker spill over to others because assignment is exclusive. We show that optimal incentives require a strict and evolving priority ranking through which workers are assigned the task. This ranking implies that workers' average workloads differ even when they are symmetric in all payoff-relevant respects. We characterize how workforce size, monitoring, and working conditions shape the scope of optimal incentive provision and the resulting inequality among workers.