Contractual Incentives and Career Concerns
24 Pages Posted: 19 Aug 2014
Date Written: August 18, 2014
Abstract
In a multi-period model of optimal contracting and career concerns, we show long-term contracting with renegotiation dominates short-term contracting if there is non-contractible information. If the non-contractible information is not effectively contractible through renegotiation of long-term contracts, the labor market may play an important role in providing incentives in a world of multiple information sources and several tasks.
Keywords: dynamic agency, renegotiation, career concerns, non-contractible information
Suggested Citation: Suggested Citation
Christensen, Peter Ove and Frimor, Hans and Frimor, Hans and Sabac, Florin, Contractual Incentives and Career Concerns (August 18, 2014). AAA 2015 Management Accounting Section (MAS) Meeting, Available at SSRN: https://ssrn.com/abstract=2482579 or http://dx.doi.org/10.2139/ssrn.2482579
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