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Career Concerns, Contracts, and Effort Distortions

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  • Fredrik Andersson

    (Lund University)

Abstract

A two-period, career-concerns model with symmetric information but uncertainty about each worker's ability is analyzed. Contracts are unobservable, but incomes are observable. It is shown that effort is distorted upward by contracts being unobservable and that the distortion depends positively on turnover.

Suggested Citation

  • Fredrik Andersson, 2002. "Career Concerns, Contracts, and Effort Distortions," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 42-58, January.
  • Handle: RePEc:ucp:jlabec:v:20:y:2002:i:1:p:42-58
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    References listed on IDEAS

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    1. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 599-617.
    2. François Contensou & Radu Vranceanu, 1998. "A model of working time under utility competition in the labor market," Journal of Economics, Springer, vol. 67(2), pages 145-166, June.
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    Cited by:

    1. Irlenbusch, Bernd & Sliwka, Dirk, 2006. "Career concerns in a simple experimental labour market," European Economic Review, Elsevier, vol. 50(1), pages 147-170, January.
    2. Bilanakos, Christos, 2013. "Career concerns and firm – sponsored general training," Research in Economics, Elsevier, vol. 67(2), pages 117-132.
    3. repec:eee:jeborg:v:137:y:2017:i:c:p:37-53 is not listed on IDEAS
    4. Bardsley, Peter & Erkal, Nisvan & Nikiforakis, Nikos & Wilkening, Tom, 2013. "Recursive contracts, firm longevity, and rat races: An experimental analysis," European Economic Review, Elsevier, vol. 61(C), pages 217-231.
    5. Michael Schwarz & Sergei Severinov, 2009. "Investment Tournaments: When Should a Rational Agent Put All Eggs in One Basket?," NBER Working Papers 15136, National Bureau of Economic Research, Inc.
    6. Tsung-Sheng Tsai & Yasunari Tamada, 2004. "Allocation of Decision-Making Authority with Principal's Reputation Concerns," Econometric Society 2004 Far Eastern Meetings 701, Econometric Society.
    7. Braz Camargo & Elena Pastorino, 2016. "Learning-by-Employing: The Value of Commitment under Uncertainty," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 581-620.
    8. BÃ¥rd Harstad, 2007. "Organizational Form and the Market for Talent," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 581-611.
    9. Meagher, Kieron & Prasad, Suraj, 2016. "Career concerns and team talent," Journal of Economic Behavior & Organization, Elsevier, vol. 129(C), pages 1-17.
    10. Michael Schwarz & Sergei Severinov, 2010. "Investment Tournaments: When Should a Rational Agent Put All Eggs in One Basket?," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 893-922, October.
    11. Peter Bardsley & Nisvan Erkal & Nikos Nikiforakis & Tom Wilkening, 2011. "Recursive Contracts, Firm Longevity, and Rat Races: Theory and Experimental Evidence," Department of Economics - Working Papers Series 1122, The University of Melbourne, revised 2011.

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