EconPapers    
Economics at your fingertips  
 

The Value of Entrepreneurial Failures: Task Allocation and Career Concerns

Andrea Canidio
Authors registered in the RePEc Author Service: Patrick Legros

No 11295, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The task assignment that maximizes present expected output is not necessarily the most informative about an agent’s comparative advantage at different tasks. En- trepreneurs are free to choose their task assignment—workers in firms are not. When labor market frictions are low, any surplus generated by a more informative task as- signment is captured by the worker, and firms maximize present expected output in their task assignment. Hence, agents may choose entrepreneurship to learn their comparative advantage. The opposite holds when labor market frictions are large. The model establishes a causal relation between the degree of labor market frictions, the value of entrepreneurial failures, the level of entrepreneurial activity, the degree of firms’ short-termism, and the rate of within-firm talent discovery. The theoretical correlations between these variables are consistent with the evidence available for the US and continental Europe.

Keywords: entrepreneurship; Entrepreneurial failures; Organizational choice; Learning; Task allocation; Career concerns (search for similar items in EconPapers)
JEL-codes: D83 J24 J62 L26 M13 (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-bec, nep-ent, nep-hrm, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://cepr.org/publications/DP11295 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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:cpr:ceprdp:11295

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11295

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-19
Handle: RePEc:cpr:ceprdp:11295