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Coordination under the Shadow of Career Concerns

Author

Listed:
  • Koch Alexander K

    (Aarhus University)

  • Morgenstern Albrecht

    (Bundeskanzleramt (Federal Chancellery))

Abstract

A firm's innovation process requires employees to develop novel ideas and to coordinate with each other to turn the tacit knowledge embodying these ideas into better products and services. Such work outcomes provide signals about employees' abilities to the labor market, and therefore career concerns arise. The effects of career concerns can both be good' (enhancing incentives for effort in developing ideas) and bad' (preventing voluntary coordination). Our model shows how a firm can take these conflicting forces into account through the design of its explicit incentive system and the way it organizes work processes.

Suggested Citation

  • Koch Alexander K & Morgenstern Albrecht, 2010. "Coordination under the Shadow of Career Concerns," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-40, March.
    • Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:10
    DOI: 10.2202/1935-1704.1627
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    More about this item

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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