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AN ECONOMIC THEORY OF WORKAHOLICS AND ALCOHOLICS
Author(s) -
FINKLE AARON,
SHIN DONGSOO
Publication year - 2014
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12049
Subject(s) - productivity , economics , agency (philosophy) , order (exchange) , private information retrieval , computer security , computer science , finance , macroeconomics , sociology , social science
This paper considers the role of alcohol in agency problems in order to provide an economic rationale for alcoholics and workaholics. In our model, alcohol reduces productivity, but also can make imbibers blurt private information. We show that in the optimal contract, low‐productivity workers are compelled to over‐indulge in alcohol, while high‐productivity workers overproduce output. Thus, workers are made into “alcoholics” and “workaholics” depending on their productivity. We conclude that excessive drinking (working) may be the result, not the cause, of low (high) productivity of workers . ( JEL D82, VSOP)