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Strategic shirking in competitive labor markets: A general model of multi‐task promotion tournaments with employer learning
Author(s) -
DeVaro Jed,
Gürtler Oliver
Publication year - 2020
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.12342
Subject(s) - tournament , promotion (chess) , task (project management) , microeconomics , learning effect , economics , computer science , business , management , political science , mathematics , combinatorics , politics , law
In a multitask, market‐based promotion tournament model, under different environments concerning employer learning about worker ability, it is shown that: (a) asymmetric learning in multitask jobs is a necessary condition for “strategic shirking” (i.e., underperforming on certain tasks to increase the promotion probability); (b) when learning becomes increasingly symmetric on one task, the effort allocated to that task could increase or decrease, but effort on the other task increases; (c) strategic shirking does not occur in equilibrium in single‐task models; and (d) promotions signal worker ability even when there is symmetric learning on one task, if learning is asymmetric on another.