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Rat Race Redux Adverse Selection in the Determination of Work Hours

Cover Rat Race Redux Adverse Selection in the Determination of Work Hours
Rat Race Redux Adverse Selection in the Determination of Work Hours
Rene M Landers
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In these groups compiementarites among employees are such that small differences in an individual's level of performance can generate large differences in the value of output produced by the group. 16 Teams of professionals developing new products with short product life cycles (e. G. , software engineers) may therefore be especially likely to be characterized by excessive work norms.
Rat race effects might also appear in the competition for managerial positions in hierarchical settings where t
...he actions of managers high up in the hierarchy have a multiplicative effect on output through their influence on employees lower down in the hierarchy (Rosen, 1982).
' 6 Kremer (1993) argues that "o-nng" production functions are ubiquitous and can account for a very long list of otherwise anomalous features of labor markets.
15 The separating equilibrium we identify is clearly inefficient relative to the full information case. Of more interest is the finding that the equilibrium can be inefficient even given information constraints.


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