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dc.contributor.authorGarrett, Danielen_US
dc.contributor.authorPavan, Alessandroen_US
dc.description.abstractWe characterize a firm's profit-maximizing turnover policy in an environment where managerial productivity changes stochastically over time and is the managers' private information. Our key positive result shows that the productivity level that the firm requires for retention declines with the managers' tenure in the firm. Our key normative result shows that, compared to what is efficient, the profit-maximizing policy either induces excessive retention (i.e., inefficiently low turnover) at all tenure levels, or excessive firing at the early stages of the relationship followed by excessive retention after sufficiently long tenure.en_US
dc.publisher|aNorthwestern Univ., Kellogg Graduate School of Management, Center for Mathematical Studies in Economics and Management Science |cEvanstonen_US
dc.relation.ispartofseries|aDiscussion Paper, Center for Mathematical Studies in Economics and Management Science |x1490en_US
dc.subject.keywordmanagerial turnoveren_US
dc.subject.keywordtermination clausesen_US
dc.subject.keyworddynamic mechanism designen_US
dc.subject.keywordadverse selectionen_US
dc.subject.keywordmoral hazarden_US
dc.titleManagerial turnover in a changing worlden_US
dc.typeWorking Paperen_US

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