03 de octubre: Raijo Bojilov, PUC

Paper: Incentives to Work or Incentives to Quit?

Expositor: Raijo Bojilov, PUC
Fecha: Miércoles 03 de octubre de 2018
Hora: 13:00 horas a 14:00 horas.
Lugar: Avda. Santa Clara N° 797,
Campus Ciudad Empresarial,
Sala C-302 – Edificio Cubo

Abstract

Employees often learn about their ability while working, and the resulting beliefs interact with pay incentives to shape employment outcomes. This paper investigates this issue within a model that incorporates learning about ability on the job, dynamic selection, effort, and variation in pay incentives. The empirical analysis is based on unique data from a US call center. The results show that dynamic selection and experimentation with `risky’ workers are major channels through which pay incentives affect employment outcomes, profits, and compensation. Under the implemented and the profit-maximizing contracts the gains from dynamic selection and experimentation outweigh the gains from experience accumulation and effort.