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Managers as administrators: reputation and incentives

[journal article]

Dasgupta, Amil; Sarafidis, Yianis

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Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-282956

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Abstract In many firms managers play the role of administrators, adding value by successfully implementing solutions to problems that the firm may face. We model the career concerns of administrators. When administrators receive the same in formation but differ in their administrative abilities, we show that they may not choose tasks that are appropriate for the problems they face. In particular, in any pure strategy equilibrium of our model, administrators do not condition their behavior on any of their private information, despite the fact that they are risk neutral and know their administrative ability. We thus identify a novel source of incentive conflicts in firms. We also examine the robustness of these results to various extensions.
Keywords reputation
Classification Management Science
Free Keywords D82; C72; incentive conflicts; ccareer concerns; conformism
Document language English
Publication Year 2009
Page/Pages p. 155-163
Journal Journal of Economic Behavior & Organization, 70 (2009) 1-2
DOI http://dx.doi.org/10.1016/j.jebo.2008.12.009
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)