Rat Races and Glass Ceilings- Career Paths in Organizations

In an ongoing organization, such as a large law partnership, employees are motivated not only by current rewards but also by the prospect of promotion, and the opportunity to influence policy and make rules in the future. This leads to a dynamic programming problem in contract design. We model career design in such a firm as a recursive mechanism design problem in an overlapping generations environment. Agents entering the firm may differ in their private characteristics which affect their costs of effort. We find that under recursive structure, a profit-maximizing principal offers, and promotion-motivated agents accept, "rat-race" contracts with very low wages and high effort levels. With wages driven down to zero, promotions become the main instrument to discriminate among agents in an adverse selection environment. The optimal adverse selection contract introduces a promotion barrier, or a "glass ceiling", for the high cost agents. We thus find that the issues of inefficiently high work levels (the "rat-race") and of unequal promotion rates (the "glass ceiling") are intimately interconnected. We apply this framework to equal opportunity and gender discrimination in employmentrecursive contracts, mechanism design, overlapping generations, rat-race, glass ceiling

BSDEs driven by a multi-dimensional martingale and their applications to market models with funding costs

We establish some well-posedness and comparison results for BSDEs driven by one- and multi-dimensional martingales. On the one hand, our approach is largely motivated by results and methods developed in Carbone et al. (2008) and El Karoui and Huang (1997). On the other hand, our results are also motivated by the recent developments in arbitrage pricing theory under funding costs and collateralization. A new version of the comparison theorem for BSDEs driven by a multi-dimensional martingale is established and applied to the pricing and hedging BSDEs studied in Bielecki and Rutkowski (2014) and Nie and Rutkowski (2014). This allows us to obtain the existence and uniqueness results for unilateral prices and to demonstrate the existence of no-arbitrage bounds for a collateralized contract when both agents have non-negative initial endowments

Reciprocity and Payment Schemes: When Equality Is Unfair

A growing literature stresses the importance of reciprocity, especially for employment relations. In this paper, we study the interaction of different payment modes with reciprocity. In particular,we analyze how equal wages affect performance and effciency in an environment characterized by contractual incompleteness. In our experiment, one principal is matched with two agents. The principal pays equal wages in one treatment and can set individual wages in the other. We find that the use of equal wages elicits substantially lower efforts and effciency. This is not caused by monetary incentives per se since under both wage schemes it is profit-maximizing for agents to exert high efforts. The treatment difference is rather driven by the fact that reciprocity is violated far more frequently in the equal wage treatment. Agents suffering from a violation of reciprocity subsequently withdraw effort. Our results suggest that individual reward and punishment opportunities are crucial for making reciprocity a powerful contract enforcement device.laboratory experiment; wage setting; wage equality; gift exchange; reciprocity; social norms; incomplete contracts; multiple agents

The Division of Labor, Coordination Costs and the Growth of Government

The paper develops a dynamic, general equilibrium model of specialization-driven growth in which the private cost of coordinating among specialists is a function of public expenditure on physical and institutional infrastructure. Growth is characterized by endogenous increases in labor specialization, the capital-labor ratio, coordination costs, market size, and the interdependence of economic agents. In addition, model provides an explanation for a frequently ignored stylized fact of economic growth, the secular rise of government's share of output, in terms of the economic role of the government.development; endogenous growth; labor specialization; dynamic model; institutions; division of labor; growth; transactions costs; coordination; coordination costs; contract enforcement; organization; neoinstitutionalism; traditional economy; interpersonal exchange; government; transaction sector; public investment; public capital

Gift Exchange and Workers' Fairness Concerns: When Equality Is Unfair

We study how different payment modes influence the effectiveness of gift exchange as a contract enforcement device. In particular, we analyze how horizontal fairness concerns affect performance and efficiency in an environment characterized by contractual incompleteness. In our experiment, one principal is matched with two agents. The principal pays equal wages in one treatment and can set individual wages in the other. We find that the use of equal wages elicits substantially lower efforts. This is not caused by monetary incentives per se since under both wage schemes it is profit-maximizing for agents to exert high efforts. The treatment difference instead seems to be driven by the fact that the norm of equity is violated far more frequently in the equal wage treatment. After having suffered from violations of the equity principle, agents withdraw effort. These findings hold even after controlling for the role of intentions, as we show in a third treatment. Our results suggest that adherence to the norm of equity is a necessary prerequisite for successful establishment of gift-exchange relations.reciprocity, gift exchange, equity, wage equality, wage setting, incomplete contracts

Courts and contractual innovation: a preliminary analysis

The authors explore a model in which agents enter into a contract but are uncertain about how a judge will enforce it. The judge can consider a wide range of evidence, or instead, use a rule-based method of judgment that relies on limited information. The authors focus on the following tradeoff: Considering a wide range of evidence increases the likelihood of a correct ruling in the case at hand but undermines the formation of precedents that resolve legal uncertainty for subsequent agents. ; In a model of contractual innovation, they show that the use of evidence increases the likelihood of innovation in any period, while rule-driven judgments increase the rate of diffusion of the innovation. When courts can use a mixture of evidence and rules, the minimum amount of evidence that induces adoption is (weakly) decreasing over time. They also examine the breadth of precedents. Overlapping jurisdictions reduce the optimal breadth of precedents because broad precedents are more likely to introduce conflict. Accordingly, overlapping jurisdictions increase the value of using evidence. The authors use their model to interpret differences between the legal systems in the U.S. and England.Contracts

Influence of Al distribution and defects concentration of ferrierite catalysts synthesized from Na-free gels in the skeletal isomerization of n-butene

The skeletal isomerization of n-butenes to isobutene has been carried out over ferrierite catalysts (Si/Al ~ 15) containing different acid sites distribution and different amount of defects. The zeolite crystals were synthesized under hydrothermal conditions in fluoride medium in the absence of alkaline cations by using suitable combinations of structure directing agents. Template-driven low density of acid sites in 10-membered-ring channels enhances the isobutene selectivity and decreases catalyst deactivation. The presence of high amount of silanol groups and Lewis acid sites increases the yields of by-products and catalysts decay.MICINN (CTQ2006-06282) CSIC (JAE-doc contract)Peer reviewe

Towards a multimedia knowledge-based agent with social competence and human interaction capabilities

We present work in progress on an intelligent embodied conversation agent in the basic care and healthcare domain. In contrast to most of the existing agents, the presented agent is aimed to have linguistic cultural, social and emotional competence needed to interact with elderly and migrants. It is composed of an ontology-based and reasoning-driven dialogue manager, multimodal communication analysis and generation modules and a search engine for the retrieval of multimedia background content from the web needed for conducting a conversation on a given topic.The presented work is funded by the European Commission under the contract number H2020-645012-RIA

The Changing Role of the Local State in UK Leisure Provision

In the UK the public sector has had a long history of both providing leisure opportunities and also regulating and encouraging activities of other agents through legislation, enforcement and subsidy. What we seek to do in this paper is to address some of the recent shifts in public sector operation so that readers can perform a comparative analysis with recent developments in their own nation state. Our basic argument is that the experience of the last two decades has been characterised by: i. a gradual fragmentation of the ‘leisure project’ ii. a growing instrumentalism in public policy which increasingly deploys leisure in order to secure wider social goals. iii. an invasive centralisation of policy and a reduction of the power of the local state. These processes are interrelated and are associated with a proliferation of more short term pragmatic policies. These in turn find expression in more centralised project funding and contracting arrangements. The shift away from traditional leisure policy and towards a contract culture was centrally driven in the UK by iconoclastic neoliberalist policies. They were the hallmark of Margaret Thatcher’s years of governance (1979-1990) .This policy direction has been continued, arguably refined and sharpened, by the three successive ‘New Labour’ governments of Tony Blair (1997-2006)