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These cases may be surprisingly rare, but the very threat of them spurs all sorts of meddlesome and unproductive efforts at protection.Perhaps this is not as surprising as it may seem.
In short order, he abandoned costly yet unproductive efforts to go head to head with Coke in South America, turning PepsiCo's attentions to countries where Coke was less entrenched and Pepsi could better compete.
If a manager is able to measure perfectly a worker's efforts, then the second has no incentive to provide unproductive efforts.
We assume that the unproductive efforts are related to the country's institutional quality and to the level of a worker's and manager's ability.
The level of unproductive efforts depends not only on the worker's wage that she receives, but also on the degree of imperfectability of the labor contracts.
Thus, since θ ∈ [0, 1] denotes the national institutional quality, the higher θ, or/and the higher the t m, the better the manager's monitoring of the worker's unproductive efforts.
Similar(47)
The more trained workers are, the less their unproductive effort levels.
The optimal unproductive effort levels exerted by a worker are ( {d}_w=Rw{t}_wfrac{e^{1-theta }-1}{t_m} ).
The more developed national institutions, the lower worker's unproductive effort levels will be.
Selecting optimal countermeasures can avoid unproductive effort, minimize costs, more quickly reduce the opportunities, and hopefully provide a longer lasting deterrent effect.
A firm with a manager who provides one unit of labor exerting effort (a m ) and a worker who exerts productive effort (a w ) and unproductive effort (d w ) produces ( 2sqrt{a_w{a}_m} ) units of final good x.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com