| Serban Ranca | University of
North Carolina |
|
I examine the implications of workaholism for
the firm and for the manager in the context of a monopoly. There are
two types of managers, workaholic and normal. In the static game, the workaholic is assigned more office time and
is paid less on average than the normal. The firm either hires both
types of managers or, if the reservation utility is large enough, only
the workaholic. In the case of a profit maximizing principal, a
firm in a society with a higher
probability of workaholism has a bigger expected profit than a firm in
a lower probability of workaholism society. A workaholic in a society
with a larger probability of workaholism is worse off relative to one
in a lower probability of workaholism society while a normal has the
same utility in either society. In case the principal is a
social planner, a workaholic and a normal in a higher probability of
workaholism society are worse off and a firm is at least as well
off than their correspondents in a society with a lower probability of
workaholism. In the dynamic game, the optimal incentive compatible
contract can be either separating or pooling in the first period
depending on the discount factor. With
separation, compared to the static contract, in the second
period both types of managers are paid less and the normal manager
works more while the workaholic puts the same hours worked. In the
first period, the workaholic is paid more than with the static contract
and assigned more vacation time while the normal manager is paid less
and assigned less office time. With pooling, the second period's
contract is similar to the static one. In the first period, the
workaholic manager is assigned less office time than with the static
contract. Moreover, compared to the separating contract, the workaholic
gets paid less and is assigned the same office time while the normal
manager gets paid more and is assigned more office time.
I analyze managerial workaholism under
competition a la Rothschild and Stiglitz [1976]. There exist separating
Nash equilibria where either both types of managers participate, or, if
the reservation utility is large enough, only workaholics participate.
Firms make zero expected profit from either type of manager. The
workaholics are assigned no vacation time by firms and put more
effective hours worked, produce more output and are overall paid more.
There exists no pooling Nash equilibrium due to “cream skimming?
(Rothschild and Stiglitz [1976]). There are two types of II. Open Source
platform financing and competition in hardware-software
markets 2008
This paper is examining Open Source platform entry financing schemes. Two cases are studied: user contributions and hardware firm investments. There is oligopolistic price competition among three types of players: software firms, an incumbent software platform (Microsoft) and hardware firms. The first type of entry occurs when the fixed development costs are lower than a threshold sum of Open Source user contributions and there are two types of equilibria, one where only part of the users contribute and an overall contribution one. The amount of contribution is user specific and increases in the user utility from Open Source development. In contrast, the hardware financed Open Source entry occurs when the development costs are too large for the Open Source users to contribute and at the same time smaller than a threshold to make it profitable for the hardware firm. The consumers are better off under the hardware financed Open Source entry if the hardware firms' costs are small enough.
|
|
