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Name of Speaker |
Guillaume Roels |
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Schedule |
14 Nov 2025, 10am – 11.30am (60 min talk + 30 min Q&A) |
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Venue |
HSS 4-1 |
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Link to register (via Zoom) |
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Title |
You, Me, or We? Co-Productive Principal-Agent Dynamics
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Abstract |
Problem Definition: Projects are often initiated by a single person – a principal – who then decides whether to execute it on their own (Single Execution) or to partner with someone else – an agent. If an agent is hired, the project execution may be joint (Joint Execution) or undertaken only by the agent (Delegated Execution). How do the resulting co-productive dynamics compare to what would be optimal to do?
Methodology/Results: We consider a co-productive principal-agent model with endogenous team formation. With financial transfers, as is typical in inter-organizational contexts, joint execution happens less frequently than optimally. Moreover, the optimal contract under joint execution turns out to be a 50%-50% equity split under mild conditions. When financial transfers are not allowed, as is typical in intra-organizational contexts, there might be too much joint execution and too little delegation if the agent is very efficient. Overall, the inefficiency created by moral hazard under delegated and joint execution is much less important than that created by the principal’s ability to engage in project hoarding and not form a team.
Managerial Implications: The problem of under-delegation should really be framed as a problem of project hoarding, i.e., principals do not partner enough. Moreover, it is only relevant within – and not between – organizations. When principals partner with an agent, they might delegate too much if agents are inefficient or contribute too much if agents are efficient. Although the principal-agent and team-production literature have essentially focused on setting incentives for effort exertion within a given operating mode, a more critical issue appears to induce principals to form a team (or not), leading to inefficient operating modes.
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About the Speaker |
Guillaume Roels is the Timken Chaired Professor of Global Technology and Innovation at INSEAD. His research lies on the interface of operational excellence, people-centric operations, and the management of services. Recent work has focused on collaborative dynamics in organizations, the design of service experiences, and customer ownership in service systems. Prior to joining INSEAD, Guillaume was an Associate Professor at the UCLA Anderson School of Management. He received an MS degree in Management Engineering and a DEA in Management from the Catholic University of Louvain, Belgium, and a PhD in Operations Research from MIT. He is currently serving as the Editor-in-Chief of Service Science, an INFORMS journal was a Department Editor at M&SOM. He also served as the President of the M&SOM Technology, Innovation, and Entrepreneurship (TIE) Specific Interest Group (SIG) and the President of the M&SOM Service Management (SIG). Recent research awards include a finalist position on the 2023 POMS College of Service Operations Management Best Student Paper Competition, a finalist position in the 2023 INFORMS Social Media Analytics Best Student Paper Competition, and a second place in the 2023 INFORMS Service Science Cluster Best Paper Competition. |
