Asymmetric Learning and the CEO Labor Market

Michael Waldman () and Jan Zabojnik ()
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Michael Waldman: Cornell University

No 1539, Working Paper from Economics Department, Queen's University

Abstract: Many models of the CEO market build on the classic analyses of Lucas (1978) and Rosen (1982) characterized by full information, a limited role for firm-specific human capital, and efficient allocation of workers across jobs and firms. But empirical evidence is not consistent with this approach. We explore an alternative focused on asymmetry of information between an executive's prospective employer and other potential employers, and an important role for firm-specific human capital. We show that our model better captures findings in the empirical literature concerning the CEO labor market than both the full information and efficient assignment approach and alternative models based on asymmetric information and inefficiencies.

Keywords: CEOs; asymmetric employer learning; firm-specific human capital (search for similar items in EconPapers)
JEL-codes: G14 G34 J62 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2025-08
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