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Managers as administrators: reputation and incentives
[journal article]
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... view more
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.... view less
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
https://doi.org/10.1016/j.jebo.2008.12.009
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)