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Specialized Careers
Author(s) -
BarIsaac Heski,
Hörner Johannes
Publication year - 2014
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12065
Subject(s) - task (project management) , license , generalist and specialist species , computer science , microeconomics , actuarial science , business , economics , management , ecology , habitat , biology , operating system
An agent has different abilities in two types of tasks. These tasks are revealed over time through his performance. The agent initially decides whether to engage in only one task (specialize) or to take on any task that arises (be a generalist). This decision trades off the cost of being idle against staying available for relatively lucrative tasks. We compare specializing with acting as a generalist in an infinite‐horizon model and provide complete characterizations of efforts. We show how specializing acts as a means of committing to exert more effort. In a two‐period version of the model, this implies that positive costs for switching strategies, through license fees, for example, may be socially desirable.