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Transparency, Career Concerns, and Incentives for Acquiring Expertise

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  • Bar-Isaac Heski

    (NYU, heski@nyu.edu)

Abstract

An agent, who cares about signaling his ability, chooses among different projects that generate observable outcomes. The agent's information about which project delivers a good outcome depends on both his ability and his effort. This paper examines how the agent's incentives for effort change depending on whether or not the agent's project choice is observed. If this choice is publicly observed, the agent's project choice is distorted towards particular types of projects. When the outcomes of these advantaged projects are particularly sensitive to the agent's information, such transparency boosts the agent's information-gathering incentives. However, when public observation of project choice leads the agent to choose information-insensitive projects, then such transparency dampens incentives. This provides a more nuanced view of the implications of action transparency in the literature on career concerns for experts.

Suggested Citation

  • Bar-Isaac Heski, 2012. "Transparency, Career Concerns, and Incentives for Acquiring Expertise," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-15, January.
    • Handle: RePEc:bpj:bejtec:v:12:y:2012:i:1:n:4
    DOI: 10.1515/1935-1704.1796
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    References listed on IDEAS

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    Cited by:

    1. S. Nageeb Ali & Roland Bénabou, 2020. "Image versus Information: Changing Societal Norms and Optimal Privacy," American Economic Journal: Microeconomics, American Economic Association, vol. 12(3), pages 116-164, August.
    2. Marino, Anthony M., 2014. "Transparency in agency: The constant elasticity case and extensions," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 9-21.
    3. Roland Benabou & Jean Tirole, 2011. "Laws and Norms," NBER Working Papers 17579, National Bureau of Economic Research, Inc.
    4. Swank, Otto H. & Visser, Bauke, 2023. "Committees as active audiences: Reputation concerns and information acquisition," Journal of Public Economics, Elsevier, vol. 221(C).
    5. Mariano, Beatriz, 2012. "Market power and reputational concerns in the ratings industry," Journal of Banking & Finance, Elsevier, vol. 36(6), pages 1616-1626.
    6. Hanzhe Li, 2022. "Transparency and Policymaking with Endogenous Information Provision," Papers 2204.08876, arXiv.org, revised Dec 2023.

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