Contractual Incentives and Career Concerns

24 Pages Posted: 19 Aug 2014

See all articles by Peter O. Christensen

Peter O. Christensen

Copenhagen Business School - Department of Finance

Hans Frimor

University of Southern Denmark - Department of Business and Economics; Aarhus University

Florin Sabac

University of Alberta - Department of Accounting, Operations & Information Systems

Date Written: August 18, 2014

Abstract

In a multi-period model of optimal contracting and career concerns, we show long-term contracting with renegotiation dominates short-term contracting if there is non-contractible information. If the non-contractible information is not effectively contractible through renegotiation of long-term contracts, the labor market may play an important role in providing incentives in a world of multiple information sources and several tasks.

Keywords: dynamic agency, renegotiation, career concerns, non-contractible information

Suggested Citation

Christensen, Peter Ove and Frimor, Hans and Sabac, Florin, Contractual Incentives and Career Concerns (August 18, 2014). AAA 2015 Management Accounting Section (MAS) Meeting. Available at SSRN: https://ssrn.com/abstract=2482579 or http://dx.doi.org/10.2139/ssrn.2482579

Peter Ove Christensen

Copenhagen Business School - Department of Finance ( email )

Solbjerg Plads 3
Frederiksberg, DK-2000
Denmark
+45 6140 3237 (Phone)

Hans Frimor

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

Aarhus University ( email )

Department of Economics and Business
Bartholins Allé 10
Aarhus DK-8000
Denmark
+45 8942 2141 (Phone)

Florin Sabac (Contact Author)

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

Register to save articles to
your library

Register

Paper statistics

Downloads
112
Abstract Views
1,072
rank
243,594
PlumX Metrics