Career Tournaments

Authors

  • Pablo Casas-Arce

    1. Universitat Pompeu Fabra
      Department of Economics and Business
      Ramon Trias Fargas 25-27
      Barcelona 08005, Spain
    2. Barcelona GSE
      Public-Private Sector Research Center IESE Business School University of Navarra Navarra, Spainpablo.casas@upf.edu
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  • I am grateful to Luca Anderlini, Heski Bar-Isaac, Jordi Blanes-i-Vidal, Guido Friebel, Ian Jewitt, Paul Klemperer, David McAdams, Meg Meyer, Joel Shapiro, three referees, and a co-editor for valuable suggestions, and to seminar participants at EEA-ESEM 2007 (Budapest), ESSET 2005 (Gerzensee), ESWC 2005 (London), SAE 2007 (Granada), Essex, and Oxford for their comments. I also acknowledge the support of the Ministerio de Ciencia y Tecnología (SEJ2007-64340) and the Public-Private Sector Research Center at IESE Business School.

Abstract

This paper studies a model of career concerns where (besides agents having different ability levels) principals are heterogeneous. Two types of heterogeneity are considered: principals can differ in their productivities, and in the visibility of the agents working for them. Productivity differences result in convex wage profiles and generate assortative matching between principals and agents. Visibility differences, on the other hand, affect the mobility and career prospects of agents, and can generate nonassortative matching. We characterize the equilibrium in this market, derive implications for the behavior of agents, and examine the incentives to invest in increasing productivity and visibility.

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