Strategic Shirking in Competitive Labor Markets: A General Model of Multi-Task Promotion Tournaments with Employer Learning

53 Pages Posted: 8 Feb 2017 Last revised: 25 Dec 2018

See all articles by Jed DeVaro

Jed DeVaro

California State University, East Bay

Oliver Gürtler

University of Cologne

Date Written: December 20, 2018

Abstract

In a multi-task, market-based promotion tournament model, under different environments concerning employer learning about worker ability, it is shown that:

i) Asymmetric learning in multi-task jobs is a necessary condition for "strategic shirking" (i.e., underperforming on certain tasks to increase the promotion probability).
ii) 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.
iii) Strategic shirking does not occur in equilibrium in single-task models.
iv) Promotions signal worker ability even when there is symmetric learning on one task, if learning is asymmetric on another.

Keywords: strategic shirking, promotions, classic and market-based tournaments, symmetric learning, asymmetric learning, inefficient job assignments, inefficient effort allocation

JEL Classification: J24, M53

Suggested Citation

DeVaro, Jed and Gürtler, Oliver, Strategic Shirking in Competitive Labor Markets: A General Model of Multi-Task Promotion Tournaments with Employer Learning (December 20, 2018). Available at SSRN: https://ssrn.com/abstract=2912964 or http://dx.doi.org/10.2139/ssrn.2912964

Jed DeVaro

California State University, East Bay ( email )

25800 Carlos Bee Boulevard
Hayward, CA California 94542
United States
1(510)885-3289 (Phone)

HOME PAGE: http://www2.cbe.csueastbay.edu/fac_page/final/index.php?id=308

Oliver Gürtler (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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