Careers are often shaped by favoritism, even though this undermines the performance of firms. When controlling shareholders weigh the efficiency costs of favoritism against its private benefits, the quality of corporate governance enhances meritocratic promotions and so encourages workers’...

We exposit an integrated agency model of multi-period career concerns and labor market equilibrium with managerial reservation utility levels, and thus pay levels, determined endogenously for firms of different sizes. Stochastic managerial talent takes two forms: a manager drawn from a tighter...

This paper presents theoretical analysis of how career concerns and shareholder monitoring affect chief executive officer (CEO) agency costs. We investigate investment efficiency prior to CEO retirement based on a sample of Chinese state-owned enterprises (SOEs) during the 1999-2007 period and...

We study the impact of changes in the commitment power of a principal on cooperation among agents, in a model in which the principal and her agents are symmetrically uncertain about the agents' innate abilities. When the principal cannot commit herself to long-term wage contracts, two types of...

We study team design in the presence of career concerns. In the model, the agents have explicit effort incentives from performance-dependent compensation contracts and implicit effort incentives from career concerns. With uniform teams, the principal assigns agents with similar career concerns...

Standard models of promotion tournaments assume that firms can commit to arbitrary tournament prizes. In this paper, a firm's ability to adjust tournament prizes is constrained by the outside labor market, through the wages other firms are willing to offer to the promoted and unpromoted workers....

Inspired by the literature on the importance of local career networks for the quality of labor market matches we investigate whether human capital externalities arise from higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany, we find that...

This paper studies the effect of increased competition in the product market on managerial incentives. I propose a simple model of career concerns where firms are willing to pay for managerial talent to reduce production costs, but also to subtract talented CEOs from competitors. This second...

Inspired by the literature on the importance of career networks for the quality of labor market matches we investigate whether human capital externalities arise from higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany, we find that...