Arbeitspapier
The Optimal Duration of Contracts
We study the optimal duration of contracts in a principal-agent framework with both moral hazard and adverse selection. Agents decide on a contract-specific and non-verifiable investment. Incentive compatibility requires that initial contracts, which serve to screen the ability of newly hired agents, cannot be longer than continuation contracts, offered to successful agents. Initial contracts remain unpaid unless service quality is unobservable to other agents and the share of high-ability agents is high. Optimal durations depend, in non-monotonic ways, on the principal’s ow valuation of the agent’s service and the share of high-ability agents.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 6808
- Klassifikation
-
Wirtschaft
Wages, Compensation, and Labor Costs: General
Transactional Relationships; Contracts and Reputation; Networks
Labor Contracts
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- Thema
-
contract length
term length
screening
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Poutvaara, Panu
Takalo, Tuomas
Wagener, Andreas
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Poutvaara, Panu
- Takalo, Tuomas
- Wagener, Andreas
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2017
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