Direkt zum Inhalt

Belief Precision and Effort Incentives in Promotion Contests

Referierte Aufsätze Web of Science

Jeanin Miklós-Thal, Hannes Ullrich

In: The Economic Journal 125 (2015), 589, S. 1952-1963


The career concerns literature predicts that incentives for effort decline as beliefs about ability become more precise (Holmström, 1982, 1999). In contrast, we show that effort can increase with belief precision when agents compete for promotions to better paid jobs that are assigned on the basis of perceived abilities. In this case, an intermediate level of precision provides the strongest incentive for effort, with effort increasing (decreasing) when beliefs are less (more) precise.

Hannes Ullrich

Deputy Head of Department in the Firms and Markets Department