Reputation, career concerns, and job assignments

Leonardo Martinez

No 06-01, Working Paper from Federal Reserve Bank of Richmond

Abstract: Does a worker who had a successful career have stronger or weaker incentives to manipulate his reputation than a worker who performed poorly? This paper presents a tractable model that allows us to study career concerns when the strength of a worker?s incentives depends on his employment history (the history of his past actions, jobs, and performances). More specifically, the paper incorporates standard job assignments into the main model in Holmstrom?s (1999) seminal paper on career concerns. Equilibrium wages, equilibrium job assignments, and the strength of career-concern incentives are the same for all employment histories that lead to the same worker's reputation. (With reputation we refer to beliefs about the worker's future productivity.) We show that, typically, workers with a better reputation have stronger incentives than workers with a worse reputation. Furthermore, we show that when the strength of incentives depends on employment history, (i) a ratchet effect may appear, (ii) in spite of this ratchet effect, incentives may be stronger, and (iii) incentives may be stronger when beliefs about ability are more precise. ; Previous title: Reputation and career concerns

Keywords: Stochastic; analysis (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://richmondfed.org/publications/research/working_papers/2006/wp_06-1R.cfm (text/html)
https://www.richmondfed.org/-/media/RichmondFedOrg ... 2006/pdf/wp06-1R.pdf (application/pdf)

Related works:
Journal Article: Reputation, Career Concerns, and Job Assignments (2009)
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:fip:fedrwp:06-01

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by Christian Pascasio ().