English

Automation and Task Allocation Under Asymmetric Information

Theoretical Economics 2025-11-05 v1

Abstract

A firm can complete the tasks needed to produce output using either machines or workers. Unlike machines, workers have private information about their preferences over tasks. I study how this information asymmetry shapes the mechanism used by the firm to allocate tasks across workers and machines. I identify important qualitative differences between the mechanisms used when information frictions are large versus small. When information frictions are small, tasks are substitutes: automating one task lowers the marginal cost of other tasks and reduces the surplus generated by workers. When frictions are large, tasks can become complements: automation can raise the marginal cost of other tasks and increase the surplus generated by workers. The results extend to a setting with multiple firms competing for workers.

Keywords

Cite

@article{arxiv.2511.02675,
  title  = {Automation and Task Allocation Under Asymmetric Information},
  author = {Quitzé Valenzuela-Stookey},
  journal= {arXiv preprint arXiv:2511.02675},
  year   = {2025}
}
R2 v1 2026-07-01T07:21:28.205Z