Resource title

Career Concerns in a Simple Experimental Labour Market

Resource image

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Resource description

We experimentally investigate a simple version of Holmström?s career concerns model in which firms compete for agents in two consecutive periods. Profits of firms are determined by agents? unknown ability and the effort they choose. Before making second-period wage offers firms are informed about first-period profits. In a different treatment firms additionally learn the abilities of agents. Theory suggests high first-period equilibrium effort in the hidden ability treatment but no effort elsewhere. However, we find that effort is significantly higher in the revealed ability treatment and therefore conclude that transparency does not weaken, but strengthen career concerns incentives.

Resource author

Bernd Irlenbusch, Dirk Sliwka

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/20098

Resource license

Adapt according to the presented license agreement and reference the original author.