9. multitask setting A popular metaphor is that of a balanced scorecard, that a variety of measures should be used in evaluating a manager and that they should be treated in balanced fashion. Taking this literally, return to the multitask setting in Chapter 15, and especially the general setup in Examples 15.4 and 15.5. The firm seeks a balanced supply of input H to two underlying tasks. Two performance measures, specified in slightly different fashion than in Chapter 15, are available:
x = a1 + αa2 + ε and y = γa1 + a2 +
ε. As before, ε and
ε are independent, normal random variables, and each has a variance of 10,000. Remaining details can be found in Examples 15.4 and 15.5.

(a) Provide a specification of α and γ such that the optimal (linear)
contract equally weights the two measures.

(b) Provide a second specification such that the first measure is weighted more heavily than the second in the optimal (linear)
contract.

(c) Are these measures controllable? Are they informative?

(d) Contrast this exercise with problem 15-10.
10. informativeness and usefulness Verify the claim in Example 16.5.