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Career Concerns, Matching, And Optimal Disclosure Policy

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  • Arijit Mukherjee

Abstract

Raiders may suffer from information disadvantage since the current employer is often better informed about his workers' quality. When workers have career concerns and matching influences productivity, the initial employer can strategically disclose information to influence incentives and matching efficiency. Long-term complete contracts induce full disclosure when raiders are perfectly competitive. The optimal short-term contract induces full disclosure if raiders are perfectly competitive, and the workers are risk neutral and are not liquidity constrained. These conditions are not only sufficient but also "almost necessary" for full disclosure. Partial disclosure may be optimal if any of these conditions is relaxed. Copyright © (2008) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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  • Arijit Mukherjee, 2008. "Career Concerns, Matching, And Optimal Disclosure Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1211-1250, November.
  • Handle: RePEc:ier:iecrev:v:49:y:2008:i:4:p:1211-1250
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    Cited by:

    1. Heski Bar-Isaac & Ian Jewitt & Clare Leaver, 2007. "Information and Human Capital Managment," Working Papers 07-28, New York University, Leonard N. Stern School of Business, Department of Economics.
    2. Alexander K. Koch & Eloïc Peyrache, 2011. "Aligning Ambition and Incentives," Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(3), pages 655-688.
    3. Pavan, Alessandro & Calzolari, Giacomo, 2009. "Sequential contracting with multiple principals," Journal of Economic Theory, Elsevier, vol. 144(2), pages 503-531, March.
    4. Clare Leaver & Gian Luigi Albano, 2004. "Transparency, Recruitment and Retention in the Public Sector," Economics Series Working Papers 219, University of Oxford, Department of Economics.
    5. Daniel F. Garrett & Alessandro Pavan, 2012. "Managerial Turnover in a Changing World," Journal of Political Economy, University of Chicago Press, vol. 120(5), pages 879-925.
    6. Ján Zábojník, 2012. "Promotion tournaments in market equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 213-240, September.
    7. Miriam Schütte & Philipp Christoph Wichardt, 2013. "Delegation and Interim Performance Evaluation," CESifo Working Paper Series 4193, CESifo Group Munich.
    8. Ferreira, Daniel & Nikolowa, Radoslawa, 2017. "Adverse Selection and Assortative Matching in Labor Markets," CEPR Discussion Papers 11869, C.E.P.R. Discussion Papers.
    9. Paul Oyer & Scott Schaefer, 2012. "Firm/Employee Matching: An Industry Study of American Lawyers," NBER Working Papers 18620, National Bureau of Economic Research, Inc.
    10. repec:eee:eecrev:v:98:y:2017:i:c:p:424-441 is not listed on IDEAS
    11. Stephen Eliot Hansen, 2010. "The benefits of limited feedback in organizations," Economics Working Papers 1232, Department of Economics and Business, Universitat Pompeu Fabra.
    12. Gian Luigi Albano & Clare Leaver, 2005. "Transparency, Recuitment and Retention in the Public Sector," The Centre for Market and Public Organisation 05/132, Department of Economics, University of Bristol, UK.
    13. Koch, Alexander K. & Peyrache, Eloic, 2005. "Tournaments, Individualized Contracts and Career Concerns," IZA Discussion Papers 1841, Institute for the Study of Labor (IZA).
    14. Stephen Eliot Hansen, 2010. "The Benefits of Limited Feedback in Organizations," Working Papers 490, Barcelona Graduate School of Economics.
    15. Marc Blatter & Andras Niedermayer, 2008. "Informational Hold-Up, Disclosure Policy, and Career Concerns on the Example of Open Source Software Development," Working Papers 08-06, NET Institute, revised Sep 2008.
    16. Katolnik, Svetlana & Hakenes, Hendrik, 2014. "On the Incentive Effect of Job Rotation," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100574, Verein für Socialpolitik / German Economic Association.

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