IDEAS home Printed from https://ideas.repec.org/p/kob/dpaper/dp2022-23.html
   My bibliography  Save this paper

A Long-term Contract with a Possibility of Dismissal for a Multitasking Agent

Author

Listed:
  • Meg Adachi-Sato

    (Research Institute for Economics & Business Administration, Kobe University, JAPAN and Faculty of Business Administration and Accountancy, Khon Kaen University, THAILAND)

Abstract

This article develops a multitask agency model in which the agent has to make investments for producing both contractible output and noncontractible intermediate input in a dynamic framework when the principal can fire the agent in the long-term wage contract. The model predicts that if the diversion cost for the principal is suffciently small, the principal prefers the long-term wage contract without firing rather than the short-term wage contract or the long-term wage contract with firing. However, if the diversion cost for the principal becomes larger, the principal may be more likely to prefer the short-term wage contract or the long-term wage contract with firing. Furthermore, if the agent's bargaining power increases, the more likely the long-term wage contracts are chosen.

Suggested Citation

  • Meg Adachi-Sato, 2022. "A Long-term Contract with a Possibility of Dismissal for a Multitasking Agent," Discussion Paper Series DP2022-23, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2022-23
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Keywords

    Fixed pay; Incentive pay; Dismissal wage contracts;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kob:dpaper:dp2022-23. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University (email available below). General contact details of provider: https://edirc.repec.org/data/rikobjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.