Akhmed, Akhmedov; Anton, Suvorov - In: The B.E. Journal of Theoretical Economics 14 (2014) 1, pp. 34-34
In this paper we develop a model of discretionary employee investment in firm-specific human capital. When a firm has full bargaining power, the non-contractibility of this investment completely undermines the employee’s incentives. However, the incumbent firm’s inability to observe...