This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Two-sided Uncertainty and "Up-or-Out" Contracts

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Kahn, Charles
Huberman, Gur

Additional information is available for the following registered author(s):

Abstract

A bilateral moral-hazard problem provides a rationale for "up-or-ou t" employment contracts. The employer sets a wage higher than opportunit y cost to induce the worker to invest in firm-specific capital. If the individual does not make the grade, it is in the firm's interest ex post to fire him. Had the initial arrangement not included provisions for firing individuals, the firm would underreport the value of the employee, wrecking the incentive scheme. The basic model permits both firm and worker to be risk neutral. Therefore, it admits a straightforward multiperiod extension, which the authors also investi gate. Copyright 1988 by University of Chicago Press.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://links.jstor.org/sici?sici=0734-306X%28198810%296%3A4%3C423%3ATUA%22C%3E2.0.CO%3B2-1&origin=repec
File Format: application/pdf
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 6 (1988)
Issue (Month): 4 (October)
Pages: 423-44
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ucp:jlabec:v:6:y:1988:i:4:p:423-44

Contact details of provider:
Postal: The University of Chicago Press, Journals Division, P.O. Box 37005 Chicago, IL 60637
Fax: (773) 753-0811
Email:
Web page: http://www.journals.uchicago.edu/JOLE/home.html

Order Information:
Web: http://www.journals.uchicago.edu/JOLE/order1.html

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
  1. Raghuram G. Rajan & Luigi Zingales, 2000. "The Firm as a Dedicated Hierarchy: A Theory of the Origin and Growth of Firms," NBER Working Papers 7546, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Chong-En Bai & Chenggang Xu, 2001. "Ownership, Incentives and Monitoring," STICERD - Theoretical Economics Paper Series 413, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  3. Robert Gibbons, 1998. "Incentives in Organizations," NBER Working Papers 6695, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Edwin Leuven & Hessel Oosterbeek & Randolph Sloof & Chris van Klaveren, 2002. "Worker Reciprocity and Employer Investment in Training," Tinbergen Institute Discussion Papers 02-090/3, Tinbergen Institute. [Downloadable!]
  5. Carolyn Pitchik & Aloysius Siow, 1997. "Self-Promoting Investments," Working Papers pitchik-97-01, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  6. James Malcomson & James W. Maw & Barry McCormick, 2002. "General Training by Firms, Apprentice Contracts, and Public Policy," Economics Series Working Papers 086, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  7. Yijiang Wang, . "Demand, Supply and Coordination: An Integrated Theory of the Division of Labor," Working Papers 0405, Industrial Relations Center, University of Minnesota (Twin Cities Campus). [Downloadable!]
  8. Gibbons, Robert, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-32, Fall. [Downloadable!] (restricted)
  9. George Baker & Robert Gibbons & Kevin J. Murphy, 1993. "Subjective Performance Measures in Optimal Incentive Contracts," NBER Working Papers 4480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  10. Marko Tervio, 2003. "Mediocrity in Talent Markets," Institute for Research on Labor and Employment, Working Paper Series 1098, Institute of Industrial Relations, UC Berkeley. [Downloadable!]
  11. Lima, Francisco & Pereira, Pedro Telhado, 2001. "Careers and Wage Growth within Large Firms," IZA Discussion Papers 336, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Robert Gibbons & Michael Waldman, 1998. "A Theory of Wage and Promotion Dynamics in Internal Labor Markets," NBER Working Papers 6454, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. repec:bep:thetop:v:6:y:2006:i:1:p:1297-1297 is not listed on IDEAS
  14. Heski Bar-Isaac, 2004. "Something to Prove: Reputation in teams and hiring to introduce uncertainty," Working Papers 04-07, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  15. Michael Waldman, 1989. "Up-or-Out Contracts: A Signaling Perspective," UCLA Economics Working Papers 556, UCLA Department of Economics. [Downloadable!]
    Other versions:
  16. Bernard Sinclair-Desgagné & Olivier Cadot, 1997. "Career Concerns and the Acquisition of Firm-Specific Skills," CIG Working Papers FS IV 97-19, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
    Other versions:
  17. Oyer, Paul, 2007. "Ability and Employer Learning: Evidence from the Economist Labor Market," Research Papers 1961, Stanford University, Graduate School of Business. [Downloadable!]
    Other versions:
  18. Dan Bernhardt & Steeve Mongrain, 2007. "The Layoff Rat Race," Discussion Papers dp07-06, Department of Economics, Simon Fraser University. [Downloadable!]
  19. Robert Gibbons, 1997. "Incentives and Careers in Organizations," NBER Working Papers 5705, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. James B. Rebitzer & Lowell J. Taylor, 2006. "When Knowledge is an Asset: Explaining the Organizational Structure of Large Law Firms," Economics Working Paper Archive wp_477, Levy Economics Institute, The. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? All the bibliographic data shown here has been contributed by volunteers, thereby helping to keep this service free.

This page was last updated on 2009-11-21.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.