When Promotions induce Good Managers to be Lazy

Frederic Loss
CNAM and Imperial College London

*Antoine Renucci
Universite de Pau et des Pays de l'Adour and Universite Paris-Dauphine

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     Last modified: December 2, 2010
     Presentation date: 03/12/2011 2:45 PM in NH 1140, Session C
     (View Schedule)

Abstract
In this paper, we investigate effort provision by managers who face promotion opportunities and are delegated risk-taking. We show that as for effort provision, career concerns discipline bad-reputation managers but do not discipline good-reputation managers. This result holds true whether managers of heterogeneous reputation compete against an exogenous benchmark or against each other for a position.