Sunday, May 30, 2010

eminent domain?

This sounds familiar to me:
The tractability of our principal-agent framework also enables us to investigate several extensions. First, we introduce ex ante investments and show that there is a type of “holdup” in this framework, where workers underinvest in skills that increase their productivity in their current coercive relationship (since workers that are more productive with their current employer are coerced more) and overinvest in skills that increase their outside option (since coercion is decreasing in their outside option).
From Daron Acemoglu and Alexander Wolitzky, "The Economics of Labor Coercion," (2010) accessed here:

UPDATE: I've done a bit of "snooping around" on Wolitzky. It turns out he just finished his third year at MIT Econ. Consider him a "rising star": graduating in the top 5% of his class at Harvard in 2007 (with a double major in Mathematics and Economics), Wolitzky already has several published papers, and the paper quoted above is currently in "revise and resubmit" stage at Econometrica. You can access his website with his papers here:

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