Strategic shirking in competitive labor markets: A general model of multi‐task promotion tournaments with employer learning

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 t...

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Bibliographic Details
Published in:Journal of economics & management strategy 2020-04, Vol.29 (2), p.335-376
Main Authors: DeVaro, Jed, Gürtler, Oliver
Format: Article
Language:English
Subjects:
Labor market
Learning
Tournaments
Tournaments & championships
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Summary: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.
ISSN:1058-6407
1530-9134
DOI:10.1111/jems.12342