Milgrom, together with Bengt Holmstrom, asked what features of a contracting problem would give rise to a simpler, say, linear, incentive scheme (that is, a scheme in which the wage consisted of a base amount plus amounts that were directly proportional to specific performance measures). Previously, most theoretical papers in agency theory assumed that the main problem was to provide an incentive for an agent to exert more effort on just one activity. But in many situations, agents can actually exert unobservable efforts on several different activities. In such contexts, new kinds of incentive problems can arise, since giving an agent more incentive to exert effort on one dimension could cause the agent to neglect other important dimensions. Holmstrom and Milgrom believed that incorporating this multi-dimensional feature of incentive problems would generate implications for optimal incentive design that were more relevant for real world contracting problems.