The Hidden Costs of Downsizing

We analyze whether a principal s decision to layoff an agent affects the performance of the surviving agents. To study the impact of the decision in isolation, we conducted an experimental principal-agent game. We find that agents reduce their performance by 37% as a response to the decision. Heterogeneity in principals decisions can largely be explained by different beliefs about how agents react to layoffs.

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Year of publication:	2013
Authors:	Heinz, Matthias ; Drzensky, Frank
Publisher:	Kiel und Hamburg : ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft

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Series:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung - Session: Labor Relations in Experiments ; E05-V2
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	783119275 [GVK] hdl:10419/79764 [Handle] RePEc:zbw:vfsc13:79764 [RePEc]
Classification:	J63 - Turnover; Vacancies; Layoffs ; C91 - Laboratory, Individual Behavior ; J82 - Labor Force Composition
Source:	EconStor

Persistent link: https://www.econbiz.de/10010329299