The Experts below are selected from a list of 264 Experts worldwide ranked by ideXlab platform
Arijit Mukherjee - One of the best experts on this subject based on the ideXlab platform.
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The optimal disclosure policy when firms offer Implicit Contracts
The RAND Journal of Economics, 2010Co-Authors: Arijit MukherjeeAbstract:The observability of history is crucial for the sustenance of Implicit (or relational) Contracts. When a firm hires a sequence of short-lived workers, turnover adversely affects the observability of history—the old worker may leave the firm before communicating the history to the young. However,turnovercanalsoenhanceprofitsifmatchinggainscanbeextractedupfront.Disclosure of the workers’ productivity information affects turnover by mitigating adverse selection. Thus, the optimal disclosure policy trades off matching efficiency with the sustainability of Implicit Contracts. I show that (i) opaqueness can be optimal only for firms with moderate reputation concerns, and (ii) an opaque firm’s profit may decrease with its reputation concern.
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OPTIMAL JOB DESIGN IN THE PRESENCE OF Implicit Contracts
2010Co-Authors: Luis Vasconcelos, Arijit MukherjeeAbstract:We characterize the optimal job design in a multitasking environment when the firms rely on Implicit incentive Contracts (i.e., bonus payments). Two natural forms of job design are compared: (i) individual accountability, where each agent is assigned to a particular job and assumes full responsibility for its outcome; and (ii) team accountability, where a group of agents share responsibility for a job and are jointly accountable for its outcome. The key trade-off is that team accountability mitigates the multitasking problem but may weaken the Implicit Contracts. The optimal job design follows a cut-off rule: firms with high reputation concerns opt for team accountability, whereas firms with low reputation concerns opt for individual accountability. Team accountability is more likely the more acute the multitasking problem is. However, the cut-off rule need not hold if the firm combines Implicit incentives with explicit pay-per-performance Contracts. JEL codes:
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Optimal Job Design in the Presence of Implicit Contracts
SSRN Electronic Journal, 2010Co-Authors: Luis Vasconcelos, Arijit MukherjeeAbstract:We characterize the optimal job design in a multitasking environment when the firms rely on Implicit incentive Contracts (i.e., bonus payments). Two natural forms of job design are compared: (i) individual accountability, where each agent is assigned to a particular job and assumes full responsibility for its outcome; and (ii) team accountability, where a group of agents share responsibility for a job and are jointly accountable for its outcome. The key trade-o¤ is that team accountability mitigates the multitasking problem but may weaken the Implicit Contracts. The optimal job design follows a cut-off rule: firms with high reputation concerns opt for team accountability, whereas firms with low reputation concerns opt for individual accountability. Team accountability is more likely the more acute the multitasking problem is. However, the cut-o¤ rule need not hold if the firm combines Implicit incentives with explicit pay-per-performance Contracts.
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Sustaining Implicit Contracts when agents have career concerns: the role of information disclosure
The RAND Journal of Economics, 2008Co-Authors: Arijit MukherjeeAbstract:Firms often augment career concerns incentives with Implicit incentive Contracts. I formalize the interaction between these two incentives, and highlight its implications on a firm's decision to disclose its workers' productivity information. Disclosure enhances career concerns but inhibits Implicit Contracts. I show two main results. First, Implicit Contracts weaken (i.e., substitute) career concerns if the prior belief about the worker's ability is low, and vice versa. Second, when these incentives are substitutes, the optimal disclosure policy follows a cutoff rule: patient firms are opaque, and transparent firms never offer Implicit Contracts. These results need not hold if the incentives are complements.
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the optimal disclosure policy when firms offer Implicit Contracts
2007Co-Authors: Arijit MukherjeeAbstract:Firms often motivate their workers with Implicit incentive Contracts. Since these Contracts are sustained through the threat of future retaliations by the workers, their sustenance hinges on the worker's observability of the game's history. When a long-lived firm hires a sequence of short-lived workers, the coexistence of old and young generation of workers facilitates the observability of history. The old communicates the history to the young. Turnover adversely affects the observability of history, because the old worker may leave the firm before communicating the history to the young. But if workers are better matched with their prospective employers, efficient turnover can also enhance profit by maximizing the matching gains available for up front extraction. Disclosure of the workers' productivity information to outside labor market affects turnover by mitigating adverse selection in turnover. Thus, the optimal disclosure policy trades off matching efficiency in turnover with the sustainability of Implicit Contracts. I formalize this trade-off, and characterize the optimal disclosure policy. There are three main results: (i) opaqueness can be strictly optimal only for the firms with moderate reputation concerns, (ii) in equilibrium, an opaque firm's profit may decrease with its reputation concern, and (iii) opaqueness is less likely to be the optimal policy when the matching gains are high.
James Townsend - One of the best experts on this subject based on the ideXlab platform.
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understanding the wage patterns of canadian less skilled workers the role of Implicit Contracts understanding the wage patterns of canadian less skilled workers
Canadian Journal of Economics, 2010Co-Authors: David A Green, James TownsendAbstract:We examine the wage patterns of Canadian less skilled male workers over the last quarter-century by organizing workers into job entry cohorts.We find entry wages for successive cohorts declined until 1997 and then began to recover.Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s – a period when startwageswere relatively high. We argue that these patterns are consistent with a model of Implicit Contracts with recontracting inwhich aworker’s currentwage is determined by the best labour market conditions experienced during the current job spell. Comprendre les patterns de salaires des travailleurs canadiens moins qualifi´es: le rˆole des contrats Implicites. On examine les patterns de salaires des travailleurs masculins moins qualifi´es au cours du dernier quart de si`ecle en d´epartageant les travailleurs en cohortes diff´erentes selon le moment d’entr´ee dans le monde du travail. On d´ecouvre que les salaires `a l’entr´ee des cohortes successives ont d´eclin´e jusqu’en 1997, et qu’ensuite ils ont commenc´e `a croˆitre. Les profils de salaires se sont raffermis pour les cohortes entrant dans le monde du travail apr`es 1997, mais pas pour les cohortes qui sont entr´ees dans le monde du travail dans les ann´ees 1980 – une p´eriode o`u les salaires de d´epart ´etaient relativement ´elev´es. On sugg`ere que ces patterns sont consistants avec un mod`ele de contrats Implicites de ren´egociation qui implique que le salaire courant des travailleurs est d´etermin´e par les meilleures conditions du march´e du travail dont on a fait l’exp´erience dans la p´eriode r´ecente de travail.
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understanding the wage patterns of canadian less skilled workers the role of Implicit Contracts
2009Co-Authors: David A Green, James TownsendAbstract:We examine the wage patterns of Canadian less skilled male workers over the last quarter century by organizing workers into job entry cohorts. We find entry wages for successive cohorts declined until 1997, and then began to recover. Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s - a period when start wages were relatively high. We argue that these patterns are consistent with a model of Implicit Contracts with recontracting in which a worker's current wage is determined by the best labour market conditions experienced during the current job spell.
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understanding the wage patterns of canadian less skilled workers the role of Implicit Contracts
Canadian Journal of Economics, 2009Co-Authors: David A Green, James TownsendAbstract:We examine the wage patterns of Canadian less skilled male workers over the last quarter-century by organizing workers into job entry cohorts. We find entry wages for successive cohorts declined until 1997 and then began to recover. Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s – a period when start wages were relatively high. We argue that these patterns are consistent with a model of Implicit Contracts with recontracting in which a worker's current wage is determined by the best labour market conditions experienced during the current job spell. On examine les patterns de salaires des travailleurs masculins moins qualifies au cours du dernier quart de siecle en departageant les travailleurs en cohortes differentes selon le moment d'entree dans le monde du travail. On decouvre que les salaires a l'entree des cohortes successives ont decline jusqu'en 1997, et qu'ensuite ils ont commencea croitre. Les profils de salaires se sont raffermis pour les cohortes entrant dans le monde du travail apres 1997, mais pas pour les cohortes qui sont entrees dans le monde du travail dans les annees 1980 – une periode ou les salaires de depart etaient relativement eleves. On suggere que ces patterns sont consistants avec un modele de contrats Implicites de renegociation qui implique que le salaire courant des travailleurs est determine par les meilleures conditions du marche du travail dont on a fait l'experience dans la periode recente de travail.
David A Green - One of the best experts on this subject based on the ideXlab platform.
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understanding the wage patterns of canadian less skilled workers the role of Implicit Contracts understanding the wage patterns of canadian less skilled workers
Canadian Journal of Economics, 2010Co-Authors: David A Green, James TownsendAbstract:We examine the wage patterns of Canadian less skilled male workers over the last quarter-century by organizing workers into job entry cohorts.We find entry wages for successive cohorts declined until 1997 and then began to recover.Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s – a period when startwageswere relatively high. We argue that these patterns are consistent with a model of Implicit Contracts with recontracting inwhich aworker’s currentwage is determined by the best labour market conditions experienced during the current job spell. Comprendre les patterns de salaires des travailleurs canadiens moins qualifi´es: le rˆole des contrats Implicites. On examine les patterns de salaires des travailleurs masculins moins qualifi´es au cours du dernier quart de si`ecle en d´epartageant les travailleurs en cohortes diff´erentes selon le moment d’entr´ee dans le monde du travail. On d´ecouvre que les salaires `a l’entr´ee des cohortes successives ont d´eclin´e jusqu’en 1997, et qu’ensuite ils ont commenc´e `a croˆitre. Les profils de salaires se sont raffermis pour les cohortes entrant dans le monde du travail apr`es 1997, mais pas pour les cohortes qui sont entr´ees dans le monde du travail dans les ann´ees 1980 – une p´eriode o`u les salaires de d´epart ´etaient relativement ´elev´es. On sugg`ere que ces patterns sont consistants avec un mod`ele de contrats Implicites de ren´egociation qui implique que le salaire courant des travailleurs est d´etermin´e par les meilleures conditions du march´e du travail dont on a fait l’exp´erience dans la p´eriode r´ecente de travail.
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understanding the wage patterns of canadian less skilled workers the role of Implicit Contracts
2009Co-Authors: David A Green, James TownsendAbstract:We examine the wage patterns of Canadian less skilled male workers over the last quarter century by organizing workers into job entry cohorts. We find entry wages for successive cohorts declined until 1997, and then began to recover. Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s - a period when start wages were relatively high. We argue that these patterns are consistent with a model of Implicit Contracts with recontracting in which a worker's current wage is determined by the best labour market conditions experienced during the current job spell.
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understanding the wage patterns of canadian less skilled workers the role of Implicit Contracts
Canadian Journal of Economics, 2009Co-Authors: David A Green, James TownsendAbstract:We examine the wage patterns of Canadian less skilled male workers over the last quarter-century by organizing workers into job entry cohorts. We find entry wages for successive cohorts declined until 1997 and then began to recover. Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s – a period when start wages were relatively high. We argue that these patterns are consistent with a model of Implicit Contracts with recontracting in which a worker's current wage is determined by the best labour market conditions experienced during the current job spell. On examine les patterns de salaires des travailleurs masculins moins qualifies au cours du dernier quart de siecle en departageant les travailleurs en cohortes differentes selon le moment d'entree dans le monde du travail. On decouvre que les salaires a l'entree des cohortes successives ont decline jusqu'en 1997, et qu'ensuite ils ont commencea croitre. Les profils de salaires se sont raffermis pour les cohortes entrant dans le monde du travail apres 1997, mais pas pour les cohortes qui sont entrees dans le monde du travail dans les annees 1980 – une periode ou les salaires de depart etaient relativement eleves. On suggere que ces patterns sont consistants avec un modele de contrats Implicites de renegociation qui implique que le salaire courant des travailleurs est determine par les meilleures conditions du marche du travail dont on a fait l'experience dans la periode recente de travail.
James B Thomson - One of the best experts on this subject based on the ideXlab platform.
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loan sales Implicit Contracts and bank structure
Review of Quantitative Finance and Accounting, 1996Co-Authors: Joseph G Haubrich, James B ThomsonAbstract:We document some recent changes in the market for loan sales. We then test the main implications of several prevailing theories, using a Tobit model to relate loan sales and purchases to bank size, capital, risk, and funding mode. The results, though not definitive, broadly confirm the Pennacchi funding cost model of sales. Other data cast doubt on the importance of mergers and acquisitions for this market and on the comparability of different data sources.
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loan sales Implicit Contracts and bank structure
1993Co-Authors: Joseph G Haubrich, James B Thomson, Raghuram G RajanAbstract:A documentation of some recent changes in the market for loan sales, using a tobit model to relate quantities of loans bought and sold to bank size, capital, risk, and funding mode.
Nicolas Eber - One of the best experts on this subject based on the ideXlab platform.
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Switching Costs and Implicit Contracts
Journal of Economics, 1999Co-Authors: Nicolas EberAbstract:When firms can discriminate between old and new customers and when multiperiod binding commitments are too costly, the effects of switching costs may be mitigated thanks to Implicit Contracts offered (competitively) by firms in equilibrium and backed by reputation.
