Design of firm‐specific training in an agency relationship: Who should take the initiative?

Anthony Marino

Managerial and Decision Economics, 2019, vol. 40, issue 2, 127-140

Abstract: This paper considers the twofold problem of compensation contracting and the design of a human capital investment scheme. Before contracting, the principal and the agent can engage in a joint stochastic production process of exerting effort to raise the agent's productivity in the firm. The principal can employ synchronous effort exertion, or either actor can assume a leadership role. We determine which organizational design is best for the principal at the endogenously optimal compensation contract, depending on how the efforts interact.

Date: 2019
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https://doi.org/10.1002/mde.2986

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:40:y:2019:i:2:p:127-140

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