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Political and non-political side activities in an agency framework

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  • Anthony M. Marino

    (University of Southern California)

Abstract

This paper studies side activities, including political activities, in the context of a hidden action agency problem. Given increases in the number of employees working from home and increases in managerial political engagement, such activities have become more prevalent. We examine the impact of these activities on the optimal contact, the agent’s welfare, the firm’s profit, and total welfare. For the case of political activities, we study the impact of external negative and positive feedback as the result of these activities on the optimal contract and all equilibrium variables. We ask whether the firm should encourage or discourage these activities.

Suggested Citation

  • Anthony M. Marino, 2024. "Political and non-political side activities in an agency framework," Economics of Governance, Springer, vol. 25(1), pages 111-137, March.
    • Handle: RePEc:spr:ecogov:v:25:y:2024:i:1:d:10.1007_s10101-023-00307-3
    DOI: 10.1007/s10101-023-00307-3
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    References listed on IDEAS

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    1. Adrjan, Pawel & Gudell, Svenja & Nix, Emily & Shrivastava, Allison & Sockin, Jason & Starr, Evan, 2023. "We've Got You Covered: Employer and Employee Responses to Dobbs v. Jackson," IZA Discussion Papers 16360, Institute of Labor Economics (IZA).
    2. Vanessa C. Burbano, 2016. "Social Responsibility Messages and Worker Wage Requirements: Field Experimental Evidence from Online Labor Marketplaces," Organization Science, INFORMS, vol. 27(4), pages 1010-1028, August.
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    More about this item

    Keywords

    Side activities; Hidden action;

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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