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Rat Races and Glass Ceilings


  • Bardsley Peter

    () (University of Melbourne)

  • Sherstyuk Katerina

    () (University of Hawaii)


In an ongoing organization, such as a large law partnership firm, employees are motivated not only by current rewards but also by the prospect of promotion, and the opportunity to make the rules in the future. This leads to a recursive contract design problem in an overlapping generations environment, where current agents may become future principals. The principal offers, and promotion-motivated agents accept, harsh rat race contracts with low wages and high effort levels. Hiring and promotion probabilities emerge as the preferred instrument to screen high cost workers, who face employment barriers and a glass ceiling.

Suggested Citation

  • Bardsley Peter & Sherstyuk Katerina, 2006. "Rat Races and Glass Ceilings," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-35, November.
  • Handle: RePEc:bpj:bejtec:v:topics.6:y:2006:i:1:n:13

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    References listed on IDEAS

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    Cited by:

    1. Scotchmer, Suzanne, 2008. "Risk taking and gender in hierarchies," Theoretical Economics, Econometric Society, vol. 3(4), December.
    2. Kato, Takao & Kodama, Naomi, 2014. "Labor Market Deregulation and Female Employment: Evidence from a Natural Experiment in Japan," IZA Discussion Papers 8189, Institute for the Study of Labor (IZA).

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