Optimal contracts with randomly arriving tasks

Daniel Bird and Alexander Frug

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Workers rarely perform exactly the same tasks every day. Instead, their daily workload may change randomly over time to comply with the uctuating needs of the organiza- tion where they are employed. In this paper, we show that this typical randomness in workplaces has a striking e ect on the structure of long-term employment contracts. In particular, simple intertemporal variability in the worker's tasks is sucient to gen- erate a rich promotion-based dynamics in which, occasionally, the worker receives a (permanent) wage raise and his future work requirements are reduced.

Keywords: Dynamic contracting; random tasks; seniority; promotion. (search for similar items in EconPapers)
JEL-codes: D86 M51 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-cta, nep-hrm and nep-mic
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Related works:
Journal Article: Optimal Contracts with Randomly Arriving Tasks (2021)
Working Paper: Optimal Contracts with Randomly Arriving Tasks (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1690

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