Incentives to discover talent

Brünner, Tobias, Friebel, Guido, Holden, Richard and Prasad, Suraj (2022) Incentives to discover talent. Journal of Law, Economics, & Organization, 38 . ISSN 8756-6222

Full content URL: https://doi.org/10.1093/jleo/ewab004

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Incentives to discover talent
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Abstract

We study an agent’s incentives to discover where her talents lie before putting them to productive use. In our setting, an agent can specialize and learn about the same type of talent repeatedly, or experiment and learn about different types of talent. While experimentation is efficient for a range of distributions of talent and initial signals, labor-market institutions play a crucial role for individual incentives to experiment. Institutions that give the agent sufficiently large bargaining power, provide incentives for experimentation, but for weak bargaining power, agents specialize. We also look at how competition in the labor market, human capital accumulation, and correlation across talents affect incentives to experiment.

Keywords:experimentation, specialization
Subjects:L Social studies > L100 Economics
L Social studies > L120 Microeconomics
Divisions:Lincoln International Business School
ID Code:44511
Deposited On:12 Apr 2021 10:29

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