In multiple-task hidden-action models, the (mis-)allocation of effort may play an important role
for benefit creation. Signals which capture this benefit and which are used in incentive
schemes should thus not only be judged by the noise and the associated costs but also by
the mis-allocation which they induce. How can mis-allocation be measured? This article
presents two requirements for such a measure (invariance and monotonicity) and analyses
whether they are met by proposed measures of mis-allocation. All examined measures assert
that an unbiased signal for benefit leads to the lowest misallocation. Here, the signal leading
to the lowest mis-allocation is computed and shown to be unbiased for the benefit only under
restrictive assumptions on the cost function (equal marginal costs for different tasks).
Generally, using an unbiased signal does not imply the lowest mis-allocation.
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