Optimal Promotion Policies with the Looking-Glass Effect
This article considers a model where the agent is uncertain about his innate ability and instead makes an inference from others' (namely, the principal's) perception, as often emphasized in the psychology literature. When the principal has superior knowledge about the agent's productivity than the agent himself, the principal has an incentive to use promotions strategically to boost the agent's self-confidence. Within this framework the optimal promotion policy depends not only on the agent's current expected ability type but also on the history of his previous job assignments. We use this fact to explain why we rarely observe demotions in organizations.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:ucp:jlabec:v:24:y:2006:i:4:p:857-878. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.