Promotion, Turnover, and Preemptive Wage Offers

Dan Bernhardt and David Scoones

American Economic Review, 1993, vol. 83, issue 4, 771-91

Abstract: This paper examines the strategic promotion and wage decisions of employers when employees may be more valuable to competing firms. Competing employers must incur a cost to learn the quality of their match with a manager. Promotion signals that workers are potentially valuable managers in other firms and so can lead to turnover. To preempt competition for a manager, an employer may offer a wage high enough to discourage competitors from acquiring information and bidding up the wage further or hiring the worker away. This transfers wages from good workers to bad. More costly information acquisition yields greater expected lifetime wages. Copyright 1993 by American Economic Association.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (57)

Downloads: (external link)
http://links.jstor.org/sici?sici=0002-8282%2819930 ... O%3B2-I&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Promotion: Turnover and Preemptive Wage Offers (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:83:y:1993:i:4:p:771-91

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert (mpa@aeapubs.org).