Designing Deadlines

Erik Madsen

    Research output: Contribution to journalArticlepeer-review


    I study how an organization should manage a project of uncertain scope, when it is advised by a privately informed expert who prefers to prolong his employment. The optimal long-term contract combines a deadline for project completion and incentive payments which decline as the deadline approaches. When the firm can additionally learn about the project's state from output, the optimal deadline exhibits variable sensitivity to output, with a hard deadline at the outset of the project and increasingly soft deadlines as the project's performance declines.

    Original languageEnglish (US)
    Pages (from-to)963-997
    Number of pages35
    JournalAmerican Economic Review
    Issue number3
    StatePublished - Mar 2022

    ASJC Scopus subject areas

    • Economics and Econometrics


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