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Iossa, Elisabetta
and Rey, Patrick
(2014)
Building Reputation for Contract Renewal: Implications for Performance Dynamics and Contract Duration.
Journal of the European Economic Association, vol. 12 (n° 3).
pp. 549-574.
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Abstract
We study how career concerns affect the dynamics of incentives in a multi-period contract, when the agent's productivity is a stochastic function of his past productivity and 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: | Article |
|---|---|
| Language: | English |
| Date: | June 2014 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Career concerns, contract duration, contract renewal, reputation and dynamic incentives |
| JEL Classification: | D21 - Firm Behavior D23 - Organizational Behavior; Transaction Costs; Property Rights D86 - Economics of Contract - Theory L24 - Contracting Out; Joint Ventures; Technology Licensing L51 - Economics of Regulation |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 16 Mar 2015 14:38 |
| Last Modified: | 02 Apr 2021 15:49 |
| OAI Identifier: | oai:tse-fr.eu:27405 |
| URI: | https://publications.ut-capitole.fr/id/eprint/16475 |
Available Versions of this Item
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Building Reputation for Contract Renewal: Implications for Performance Dynamics and Contract Duration. (deposited 09 Jul 2014 17:32)
- Building Reputation for Contract Renewal: Implications for Performance Dynamics and Contract Duration. (deposited 16 Mar 2015 14:38) [Currently Displayed]
