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Career Concerns and Policy Intransigence - A Dynamic Signalling Model

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  • Caroline D. Thomas

    () (Department of Economics, The University of Texas at Austin)

Abstract

A decision-maker might be reluctant to abandon her project when she is concerned both about social welfare and public beliefs about her ability. The decision-maker gets private information over time about whether the project will succeed or fail. Intuition suggests that in this setting the decision-maker will continue with the project for too long, both because persisting signals positive private information and in the hope of a last-minute success. I show, however, that efficiency can be achieved in equilibrium for many information structures. Surprisingly, increasing the informational asymmetry by improving the decision-maker's private information improves efficiency.Creation-Date: 2014-2

Suggested Citation

  • Caroline D. Thomas, "undated". "Career Concerns and Policy Intransigence - A Dynamic Signalling Model," Department of Economics Working Papers 161228, The University of Texas at Austin, Department of Economics, revised Dec 2016.
  • Handle: RePEc:tex:wpaper:161228
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    Cited by:

    1. Marina Halac & Ilan Kremer, 2020. "Experimenting with Career Concerns," American Economic Journal: Microeconomics, American Economic Association, vol. 12(1), pages 260-288, February.

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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