Belief Precision and Effort Incentives in Promotion ContestsEconomic Journal (2015)
The career concerns literature predicts that incentives for effort decline as beliefs about ability become more precise (Holmström, 1982/1999). In contrast, we show that effort can increase with belief precision if promotions to better-paid jobs make the returns to reputation non-linear. In this case, an intermediate level of precision provides the strongest incentive for effort, with effort increasing (decreasing) when beliefs are less (more) precise.
- promotion contests,
- career concerns
Publication DateDecember, 2015
Citation InformationJeanine Miklos-Thal and Hannes Ullrich. "Belief Precision and Effort Incentives in Promotion Contests" Economic Journal Vol. 125 Iss. 589 (2015) p. 1952 - 1963
Available at: http://works.bepress.com/jmiklosthal/11/