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Iossa, Elisabetta
and Rey, Patrick
(2012)
Building Reputation for Contract Renewal: Implications for Performance Dynamics and Contract Duration.
TSE Working Paper, n. 12-368
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Official URL : http://tse-fr.eu/pub/26677
Abstract
We study how career concerns affect the dynamics of incentives in a multi-period contract,
when the agent’s productivity can evolve exogenously (random shocks) or improve
endogenously through investment.
We show that incentives are stronger and performance is higher when the contract
approaches its expiry date. Contrary to common wisdom, long-term contracts may
strengthen reputational effects whereas short-term contracting may be optimal when investment
has persistent, long-term effects.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | November 2012 |
| Uncontrolled Keywords: | Career concerns, contract duration, contract renewal, reputation and dynamic incentives |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 09 Jul 2014 17:32 |
| Last Modified: | 02 Apr 2021 15:47 |
| OAI Identifier: | oai:tse-fr.eu:26677 |
| URI: | https://publications.ut-capitole.fr/id/eprint/15478 |
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