Term Length and the Quality of Appointments
15 Pages Posted: 26 Jan 2001
Date Written: December 2000
Consider a principal who appoints an agent. Let the agent potentially serve for a sufficiently long time that one principal is replaced by another over this period. Suppose also that the quality of the agent appointed increases with the effort the incumbent principal devotes to hiring. Then the quality of the appointment may increase with the length of the agent's term. Moreover, policies such as mandatory retirement which increase a prinicpal's concern for output after he leaves office, may induce better hiring.
Keywords: Hiring tenure, quality of appointment
JEL Classification: J20, J40
Suggested Citation: Suggested Citation