Abstract: I consider a career concerns model based on Holmstrom (1982/99) in which workers are heterogeneous across two dimensions. Workers differ in their abilities, the value of which is unknown to the market as well as to the workers themselves. They also differ in their cost of effort. workers know their own cost of effort, but it is not known to the market. I solve this model in continuous time here and compare the effort made with cost uncertainty to the effort made when workers' cost of effort is known. I find that a career can be divided into three phases. Phase 1 - employees work harder to look hard working. Phase 2 - employees work less to look lazy. Phase 3 - employees work harder to look lazy.
For questions, please contact: Srijita Ghosh - firstname.lastname@example.org