We empirically test whether executives' increases in base salary when promoted to CEO result from the wage bids of competing firms (i.e., "market-based tournaments") or from the strategic choices of the firm's board of directors to elicit optimal executive incentives (i.e., "classic...

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...

We provide a theoretical analysis of promotion tournaments in which workers 'strategically shirk' by purposely under-performing on tasks that are de-emphasized in a promotion rule, while over-performing in tasks that are emphasized in the rule, thereby increasing their chances of promotion and a...