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Strategic shirking in competitive labor markets: A general model of multi‐task promotion tournaments with employer learning

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  • Jed DeVaro
  • Oliver Gürtler

Abstract

In a multitask, market‐based promotion tournament model, under different environments concerning employer learning about worker ability, it is shown that: (a) asymmetric learning in multitask jobs is a necessary condition for “strategic shirking” (i.e., underperforming on certain tasks to increase the promotion probability); (b) when learning becomes increasingly symmetric on one task, the effort allocated to that task could increase or decrease, but effort on the other task increases; (c) strategic shirking does not occur in equilibrium in single‐task models; and (d) promotions signal worker ability even when there is symmetric learning on one task, if learning is asymmetric on another.

Suggested Citation

  • Jed DeVaro & Oliver Gürtler, 2020. "Strategic shirking in competitive labor markets: A general model of multi‐task promotion tournaments with employer learning," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(2), pages 335-376, April.
  • Handle: RePEc:bla:jemstr:v:29:y:2020:i:2:p:335-376
    DOI: 10.1111/jems.12342
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