Career Tournaments |
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Authors: | Pablo Casas‐Arce |
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Institution: | 1. Universitat Pompeu FabraDepartment of Economics and BusinessRamon Trias Fargas 25‐27Barcelona 08005, Spain;2. Barcelona GSEPublic‐Private Sector Research Center IESE Business School University of Navarra Navarra, Spainpablo.casas@upf.edu |
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Abstract: | This paper studies a model of career concerns where (besides agents having different ability levels) principals are heterogeneous. Two types of heterogeneity are considered: principals can differ in their productivities, and in the visibility of the agents working for them. Productivity differences result in convex wage profiles and generate assortative matching between principals and agents. Visibility differences, on the other hand, affect the mobility and career prospects of agents, and can generate nonassortative matching. We characterize the equilibrium in this market, derive implications for the behavior of agents, and examine the incentives to invest in increasing productivity and visibility. |
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