Reputation concerns under at-will employment

Reputation concerns under at-will employment

We study a continuous-time model of long-run employment relationship with fixed wage and at-will firing; that is, termination of the relationship is non-contractible. Depending on his type, the worker either always works hard, or can freely choose his effort level. The firm does not know the worker’s t...

Full description

Saved in:
Bibliographic Details
Main Authors: SUN, Jian, WEI, Dong
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2019
Subjects:
moral hazard
job insecurity
reputation
at-will employment
Finance and Financial Management
Organizational Behavior and Theory
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/7038
https://ink.library.smu.edu.sg/context/lkcsb_research/article/8037/viewcontent/SSRN_id3424122.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
Description
Summary:We study a continuous-time model of long-run employment relationship with fixed wage and at-will firing; that is, termination of the relationship is non-contractible. Depending on his type, the worker either always works hard, or can freely choose his effort level. The firm does not know the worker’s type and the monitoring is imperfect. We show that, in the unique Markov equilibrium, as the worker’s reputation worsens, his job becomes less secure and the strategic worker works harder. We further demonstrate that the relationship between average productivity and job insecurity is U shaped, which is consistent with typical findings in the organizational psychology literature.

Similar Items