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  • Lehrstuhl für Arbeitsmarktökonomik

    Prof. Dr. Anna Zaharieva

    © Universität Bielefeld
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Latest news

New funding: Leibniz Association approves funding for the second phase of the Leibniz Science Campus "SOEP RegioHub".

New publication: E. Damdinsuren, M. Mitkova, A. Zaharieva "Parental Networks, Wage Expectations, and Intergenerational Educational Mobility", Journal of Economics Behavior and Organization, 218, p. 146-175.

Welcome to the new research employee Asimamaw Belete, who will be enrolled in the RTG 2865 "Copying with Uncertainty in Dynamic Economies" and Bielefeld Graduate School of Economics and Management (BIGSEM).

Lehrstuhl für Arbeitsmarktökonomik


Universität Bielefeld
Fakultät für Wirtschaftswissenschaften
Lehrstuhl für Arbeitsmarktökonomik
Postfach 10 01 31
33501 Bielefeld, Deutschland


Universität Bielefeld
Fakultät für Wirtschaftswissenschaften
Lehrstuhl für Arbeitsmarktökonomik
Universitätsstraße 25
D-33615 Bielefeld


Raum W8-101
Telefon (+49) (0)521 106 5637
Briefkasten U/V3 1757


Economics Seminar Talk on

We analyze a repeated principal-agent setting in which the principal cares about the agent’s verifiable effort as well as an extra profit that can be generated only if the agent is talented. The agent is overconfident about his talent and updates beliefs using Bayes’ rule. An exploitation contract in which the agent is only compensated for his effort if the extra profit materializes maximizes the principal’s profits.
In this optimal contract, the agent’s principal-expected compensation decreases over time and learning exacerbates his exploitation, unless he has been revealed to be talented. Therefore, the principal’s profits may increase with failures, and the agent may only be employed if his perceived talent is sufficiently low. As an application of these results, we analyse a firm’s optimal promotion policy, and show that promotion to a new job may optimally be based on the agent being successful in a previous job, even if the agent’s talent across jobs is entirely uncorrelated. This provides a novel explanation for the so-called “Peter Principle”, for which Benson et al., 2019 have recently provided evidence in a setting with verifiable performance and highly confident workers.

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