Career Concerns with Exponential Learning

Alessandro Bonatti and Johannes Hörner

No 17-793, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: This paper analyzes the impact of market structure on career concerns. Effort increases the probability that a skilled agent achieves a one-time breakthrough. Wages are based on assessed ability and on expected output. For any wage, the agent works too little, too late. Under short-term contracts, effort and wages are single-peaked with seniority, due to the strategic substitutability of effort levels at different times. Both delay and underprovision of effort worsen if effort is observable. Commitment to wages by competing firms mitigates these inefficiencies. In that case, the optimal contract features piecewise constant wages and severance pay.

Keywords: career concerns; experimentation; career paths; up-or-out; reputation (search for similar items in EconPapers)
JEL-codes: D82 D83 M52 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-cta, nep-hrm and nep-mic
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... ner/single_agent.pdf Full text (application/pdf)

Related works:
Journal Article: Career concerns with exponential learning (2017)
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:tse:wpaper:31604

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().