Learning-by-doing; consequences for incentive design
Through a learning-by-doing process, a firm's efficiency depends positively on the extent of its previous business activity. From a dynamic incentives perspective, therefore, efficiency is endogenous. In addition, the efficiency of the firm is likely to be subject to private information. The model captures some of the trade-offs principals face in designing incentive schemes in this context.
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References listed on IDEAS
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- repec:crs:wpaper:9609 is not listed on IDEAS Full references (including those not matched with items on IDEAS)