 Task Discretion, Labor-market Frictions, and Entrepreneurship†Andrea Canidio and Patrick Legros The Journal of Law, Economics, and Organization, 2023, vol. 39, issue 2, 420-455 Abstract: An agent can perform a job in several ways, which we call tasks. Choosing agents’ tasks is the prerogative of management within firms, and of agents themselves if they are entrepreneurs. While agents’ comparative advantage at different tasks is unknown, it can be learned by observing their performance. However, tasks that generate more information could lead to lower short-term profits. Hence, firms will allocate workers to more informative tasks only if agents cannot easily move to other firms. When, instead, workers can easily move to other firms, agents may prefer to become entrepreneurs and acquire task discretion, even if their short-term payoff is lower than employees. Our model generates novel predictions with respect to, for example, how the wage dynamics of agents who switch between entrepreneurship and employment are affected by labor and contracting frictions. (JEL D83, J24, J62, J63, L26, M13). Keywords: Task discretion; organizational choice; entrepreneurship; labor-market frictions; entrepreneurial failure; learning (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:jleorg:v:39:y:2023:i:2:p:420-455. Ordering information: This journal article can be ordered from Access Statistics for this article The Journal of Law, Economics, and Organization is currently edited by Andrea Prat More articles in The Journal of Law, Economics, and Organization from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. |
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