A Game-Theoretic Model of Tenure

Kalyan Chatterjee () and Robert C. Marshall ()
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Kalyan Chatterjee: Pennsylvania State University
Robert C. Marshall: Pennsylvania State University

Chapter Chapter 11 in Game Theory and Business Applications, 2014, pp 287-305 from Springer

Abstract: Abstract Contingent contracts for university faculty, based on output or investment, are not possible since neither output nor investment are verifiable. Further, the accumulation of discipline-specific human capital by academics is often detrimental to their opportunities outside their occupations. We have shown in this paper that the confluence of these effects results in a lifetime employment contract. Universities prefer it because it encourages increased levels of investment. Faculty members prefer it since it prevents employers from taking advantage of the erosion of their outside opportunities as they strive for results in their discipline.

Keywords: Faculty Member; Academic Freedom; Employment Contract; Subgame Perfect Equilibrium; Spot Market (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-1-4614-7095-3_11

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