Rewarding idleness
Rewarding idleness
Market wages reflect expected productivity conditional on signals of past performance and past experience. These signals are generated at least partially on the job and create incentives for agents to choose high‐profile and highly visible tasks. When engaging in visible tasks can lead to losses for which the agent is not liable, a principal may profitably distort corporate investments and reward schemes to increase the opportunity cost of these tasks. This distortion may decrease welfare as it prevents the efficient discovery of workers’ talent. Heterogeneity in employee types induces substantial diversity in organizational and contractual choices, particularly regarding the extent to which conspicuous activities are tolerated or encouraged, the composition of corporate infrastructure, and contingent wages.
433-459
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Canidio, Andrea
a4e8d96b-a879-4fb4-a661-d7fb9e3754ff
1 February 2019
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Canidio, Andrea
a4e8d96b-a879-4fb4-a661-d7fb9e3754ff
Gall, Thomas and Canidio, Andrea
(2019)
Rewarding idleness.
Journal of Public Economic Theory, 21 (3), .
(doi:10.1111/jpet.12362).
Abstract
Market wages reflect expected productivity conditional on signals of past performance and past experience. These signals are generated at least partially on the job and create incentives for agents to choose high‐profile and highly visible tasks. When engaging in visible tasks can lead to losses for which the agent is not liable, a principal may profitably distort corporate investments and reward schemes to increase the opportunity cost of these tasks. This distortion may decrease welfare as it prevents the efficient discovery of workers’ talent. Heterogeneity in employee types induces substantial diversity in organizational and contractual choices, particularly regarding the extent to which conspicuous activities are tolerated or encouraged, the composition of corporate infrastructure, and contingent wages.
Text
idleness-JPET-revision-final
- Accepted Manuscript
More information
Accepted/In Press date: 23 January 2019
e-pub ahead of print date: 1 February 2019
Published date: 1 February 2019
Identifiers
Local EPrints ID: 428166
URI: http://eprints.soton.ac.uk/id/eprint/428166
ISSN: 1097-3923
PURE UUID: 6533f89d-0d18-447d-9564-f57923fbfb7e
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Date deposited: 13 Feb 2019 17:30
Last modified: 16 Mar 2024 07:34
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Author:
Andrea Canidio
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