The DOI matches its Crossref record; 22 of the 22 references it cites were found in a registry or an index.
Managerial Incentive Problems: A Dynamic Perspective
Open accessAbstract
The paper studies how a person's concern for a future career may influence his or her incentives to put in effort or make decisions on the job. In the model, the person's productive abilities are revealed over time through observations of performance. There are no explicit output-contingent contracts, but since the wage in each period is based on expected output and expected output depends on assessed ability, an "implicit contract" links today's performance to future wages. An incentive problem arises from the person's ability and desire to influence the learning process, and therefore the wage process, by taking unobserved actions that affect today's performance. The fundamental incongruity in preferences is between the individual's concern for human capital returns and the firm's concern for financial returns. The two need be only weakly related. It is shown that career motives can be beneficial as well as detrimental, depending on how well the two kinds of capital returns are aligned.
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Metadata
- Authors
- Holmstrom, B.
- Affiliations
- National Bureau of Economic Research (US)
- Corresponding author
- Holmstrom, Bengt
- Venue
- Review of Economic Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 1999-01
- Volume
- 66
- Issue
- 1
- Pages
- 169-182
- ISSN
- 0034-6527 (ISSN-L)
- 1467-937X
- OpenAlex
- W2108548811
- Cited by
- 3,172
- References
- 22
- Citations by year
- 2026: 123 · 2025: 161 · 2024: 127 · 2023: 152 · 2022: 103 · 2021: 128 · 2020: 133 · 2019: 121 · 2018: 130 · 2017: 149 · 2016: 136 · 2015: 135 · 2014: 148 · 2013: 144 · 2012: 140
- FWCI
- 146.58
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- The Review of Economic Studies (publishedVersion)
- National Bureau of Economic Research (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- SSRN Electronic Journal (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Experimental Behavioral Economics Studies
- Social Sciences › Business, Management and Accounting › Accounting › Accounting and Organizational Management
- Keywords
- managerial incentives, career concerns, human capital, effort incentives, performance-based pay, implicit contracts, ability assessment, wage contracts
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