Working to learn

Drew Fudenberg, George Georgiadis and Luis Rayo

Journal of Economic Theory, 2021, vol. 197, issue C

Abstract: We study the joint determination of wages, effort, and training in “apprenticeships” where novices must work in order to learn. We introduce the idea of learning-by-doing as an inequality constraint, which allows masters to strategically slow training down. Every Pareto-efficient contract has an initial phase where the novice learns as fast as technologically feasible, followed by a phase where their master constrains how fast they learn. This latter phase mitigates the novice's commitment problem, and thus lets the novice consume more than they produce early on in the relationship. Our model has novel implications for optimal regulation.

Keywords: Apprenticeships; Learning by doing; Incentives; Contract Theory; Principal-agent (search for similar items in EconPapers)
JEL-codes: C6 D8 J3 L2 M5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053121001642
Full text for ScienceDirect subscribers only

Related works:
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:eee:jetheo:v:197:y:2021:i:c:s0022053121001642

DOI: 10.1016/j.jet.2021.105347

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().