Career concerns with exponential learning

• 成果类型: Article
• 署名作者: Bonatti, Alessandro; Horner, Johannes
• 署名单位: Massachusetts Institute of Technology (MIT); Yale University
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE2115
• 发表日期: 2017-01-01
• 页码: 425-475
• 关键词: Career concerns; experimentation; career paths; up-or-out; reputation

摘要

This paper examines the interplay between career concerns and market structure. Ability and effort are complements: effort increases the probability that a skilled agent achieves a one-time breakthrough. Wages are based on assessed ability and on expected output. Effort levels at different times are strategic substitutes and, as a result, the unique equilibrium effort and wage paths are single-peaked with seniority. Moreover, for any wage profile, the agent works too little, too late. Commitment to wages by competing firms mitigates these inefficiencies. In that case, the optimal contract features piecewise constant wages and severance pay.