This paper studies the effects of deadlines and infrequent monitoring in the dynamic provision of public goods. I consider a continuous-time model in which a group of agents exert costly efforts to a project over time. The project is completed once the cumulative efforts reach a pre-specified threshold, and provided that this occurs prior to the deadline, it generates a lump sum payoff. Due to the freerider problem, the agents' equilibrium efforts are lower and frontloaded when compared to the efficient outcome. In the first part, I examine the effect of deadlines on the agents' strategies, and I show that a short deadline induces the agents to raise their effort levels, but their frontloading incentives persist. In the second, I analyze the case in which the agents observe how close they are to completion infrequently (e.g., progress on a team project is accounted for during a weekly meeting). I show that even if the agents cannot commit to not renegotiate a deadline ex-post, infrequent monitoring can make deadlines self-enforcing in equilibrium.
|Original language||English (US)|
|Publisher||Social Science Research Network (SSRN)|
|Number of pages||30|
|State||Published - Jun 20 2015|