EconPapers    
Economics at your fingertips  
 

Motivate and select: Relational contracts with persistent types

Radoslawa Nikolowa ()

Journal of Economics & Management Strategy, 2017, vol. 26, issue 3, 624-635

Abstract: We develop a model of relational contracts with moral hazard and asymmetric persistent information about an employee's type. We find that the form of the optimal contract depends on the job characteristics and the distribution of employees' talent. Bonus contracts are more likely to be adopted in complex jobs and when high talent is not too common or too rare. Firms with “normal” jobs are more likely to adopt termination contracts. In labor market equilibrium, different contracts may be adopted by ex ante identical firms. Hence, we offer an explanation for the coexistence of different employment systems within the same industry.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/jems.12201

Related works:
Working Paper: Motivate and Select: Relational Contracts with Persistent Types (2014) Downloads
Working Paper: Motivate and Select: Relational Contracts with Persistent Types (2014) Downloads
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:bla:jemstr:v:26:y:2017:i:3:p:624-635

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-03-28
Handle: RePEc:bla:jemstr:v:26:y:2017:i:3:p:624-635