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Bonatti, Alessandro and Hörner, Johannes
(2017)
Career Concerns with Exponential Learning.
TSE Working Paper, n. 17-793, Toulouse
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Abstract
This paper analyzes the impact of market structure on career concerns. Effort increases the probability that a skilled agent achieves a one-time breakthrough. Wages are based on assessed ability and on expected output. For any wage, the agent works too little, too late. Under short-term contracts, effort and wages are single-peaked with seniority, due to the strategic substitutability of effort levels at different times. Both delay and underprovision of effort worsen if effort is observable. Commitment to wages by competing firms mitigates these inefficiencies. In that case, the optimal contract features piecewise constant wages and severance pay.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | March 2017 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | career concerns, experimentation, career paths, up-or-out, reputation |
| JEL Classification: | D82 - Asymmetric and Private Information D83 - Search; Learning; Information and Knowledge; Communication; Belief M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs, seniority issues) |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 30 Mar 2017 11:38 |
| Last Modified: | 02 Apr 2021 15:55 |
| OAI Identifier: | oai:tse-fr.eu:31604 |
| URI: | https://publications.ut-capitole.fr/id/eprint/23338 |
