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employment contracts, influence activities and efficient organization design

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  • Milgrom, Paul R.

Abstract

Efficient employment contracts usually fail to compensate workers for the effects of posthir ing events and decisions when changing jobs is costly. Then, when the re are executives and managers with authority to make discretionary decisions, affected employees will be led to waste valuable time tryi ng to influence their decisions. Efficient organization design coun-t ers this tendency by limiting the discretion of decision makers, espe cially for those decisions that have large distributional consequence s but that are otherwise of little consequence to the organization. Copyright 1988 by University of Chicago Press.
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Suggested Citation

  • Milgrom, Paul R., 1987. "employment contracts, influence activities and efficient organization design," Department of Economics, Working Paper Series qt6pf6c5j6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    • Handle: RePEc:cdl:econwp:qt6pf6c5j6
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