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
Institutions:	Verein für Socialpolitik - VfS

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Extent:	application/pdf
Series:	Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order.
Type of publication:	Book / Working Paper
Classification:	J63 - Turnover; Vacancies; Layoffs ; C91 - Laboratory, Individual Behavior ; J82 - Labor Force Composition
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010957953