Miklos-Thal, Jeanine; Ullrich, Hannes (2015). Belief precision and effort incentives in promotion contests. Economic Journal, 125(589):1952-1963.
The career concerns literature predicts that incentives for effort decline as beliefs about ability become more precise (Holmstrom, 1982/1999). In contrast, we show that effort can increase with belief precision when agents compete for promotions to better paid jobs that are assigned on the basis of perceived abilities. In this case, an intermediate level of precision provides the strongest incentive for effort, with effort increasing (decreasing) when beliefs are less (more) precise.
The career concerns literature predicts that incentives for effort decline as beliefs about ability become more precise (Holmstrom, 1982/1999). In contrast, we show that effort can increase with belief precision when agents compete for promotions to better paid jobs that are assigned on the basis of perceived abilities. In this case, an intermediate level of precision provides the strongest incentive for effort, with effort increasing (decreasing) when beliefs are less (more) precise.
| Item Type: | Journal Article, refereed, original work |
|---|---|
| Communities & Collections: | 03 Faculty of Economics > Department of Business Administration |
| Dewey Decimal Classification: | 330 Economics |
| Scopus Subject Areas: | Social Sciences & Humanities > Economics and Econometrics |
| Language: | English |
| Date: | 2015 |
| Deposited On: | 24 Oct 2014 12:49 |
| Last Modified: | 24 Jan 2022 04:57 |
| Publisher: | Wiley-Blackwell Publishing, Inc. |
| ISSN: | 0013-0133 |
| OA Status: | Green |
| Publisher DOI: | https://doi.org/10.1111/ecoj.12162 |
| Other Identification Number: | merlin-id:9946 |
Miklos-Thal, Jeanine