MULTITASK AGENCY AND CONTRACT CHOICE - AN EMPIRICAL EXPLORATION

The multitask-agency problem is examined empirically using contracts b etween private, integrated oil companies and their service stations in the city of Vancouver. The empirical tests assess how variations in t he characteristics of one task affect the choice of agent-compensation scheme for another. Comparative statics from the model predict that h igher-powered incentives will be offered for gasoline sales when the s econdary activity is not highly complementary with gasoline retailing, where complementarity is measured by the cross-price demand effect, t he covariation in uncertainty, and the degree of effort substitutabili ty.