The Value of Information on Deadlines

Abstract

We propose a simple model to investigate whether an agent works harder when she is informed of the tasks' deadlines (i.e., under transparent management) or not (i.e., under opaque management). We do so in a stylized model where; 1) in each period, the agent may work at some cost, rather than shirk at no cost, so as to increase her probability of completing the task, 2) the agent receives an exogenous reward if she completes the task, and 3) at a certain period that the agent knows (transparent management) or not (opaque management), an exogenous deadline will suddenly prevent the agent from working any longer on the task. We find that the agent is strictly more (less) likely to work under opaque than transparent management when the exogenous reward for the task completion is high (low), but not too high (low).