Timothy J. Perri

Coauthorship and publication efficiency

This study extends a recent paper by Jean Louis Heck and Peter A. Zaleski [1991] on trends in economics journal publication from 1969–89. The primary purpose of the work is to analyze the impact on article production of an observed dramatically increasing tendency toward coauthorship among scholars in economics. A simple model is tested with total (per capita) articles as a function of time, American Economic Association (AEA) membership, and articles coauthored per year. Results suggest that the increasing trend toward coauthorship enhances productivity in total and per-capita article production.

The Dilemma of Choosing Talent: Michael Jordans are Hard to Find

This article explores the dilemma of choosing talent using NBA data from 1987 to 2003. We find there is much uncertainty in selecting talent. If superstars are found, they are usually identified early. However, more false positives exist than correct decisions with high draft picks. Our results suggest the dilemma of choosing talent is not so much a winners curse but more like a purchase of a lottery ticket. Most times you lose, but, if you are going to win, you must buy a ticket.

Is there a winner's curse in the labor market?

Abstract When a firm can make counteroffers to workers who have received outside wage offers, a winners curse effect may exist. Raided firms do not make counteroffers to those whose value is less than the raiders wage offer, so the raider always earns negative profit when a raid is successful. In this paper, I demonstrate that, when a raided firm makes reassignment decisions in anticipation of outside wage offers, and there is at least an infinitesimal probability of exogenous turnover, a winners curse will not occur when there are counteroffers, except possibly for workers at the lowest task assignment.

Influence activity and executive compensation

Abstract Attracting an executive of desired ability or inducing effort from top executives may require a strong relation between executive compensation and firm performance. Yet the evidence suggests that there is a trivial impact of firm value on CEO compensation. I show that influence activity by executives can explain this evidence. One of the results is that a higher level of influence activity reduces the impact of firm value on executive compensation, even though influence activity is completely anticipated by firms.

Deferments and the Relative Cost of Conscription

Abstract A model of military conscription with costly deferments is developed. Deferments may enable the induction of only those with the lowest reservation wages, avoiding the usual misallocation of resources with conscription versus a volunteer military. With costly deferments, the tradeoff between conscription and a volunteer military involves the cost of deferments with the former and the higher deadweight cost of taxation with the latter. Among the results are: 1) conscription is socially preferable to a volunteer military only if a large percentage of eligible individuals is demanded by the military; 2) if conscription is used when it is socially cheaper than a volunteer military, welfare is improved if deferments have lower social benefits; and 3) ignoring other costs of conscription (e.g., higher turnover and reduced investment in human capital), the U.S. in World War II may have been near the point at which conscription and a volunteer military were of equal social cost.

Can High Prices Ensure Product Quality When Buyers Do Not Know the Sellers' Cost?

The 1981 Klein-Leffler model of product quality does not explain why high-quality firms would dissipate the rents they earn from quality-assuring price premia, and it relies on consumers knowing the cost functions of firms. In the present article, consumers do not know any firms cost of producing quality goods, so firms with a low cost of producing high quality engage in conspicuous spending to demonstrate they earn a profitable mark-up over cost. Complete rent dissipation does occur if such firms have the same cost of producing low-quality items as other firms that are worse at producing high quality. Copyright 2001 by Oxford University Press.

Economists behaving badly: Publications in predatory journals

The extent of publishing in predatory journals in economics is examined. A simple model of researcher behavior is presented to explore those factors motivating an academic to publish in predatory journals as defined by Beall (Criteria for determining predatory open access publishers, Unpublished document, 3rd edn, 2015. https://scholarlyoa.com/publishers/). Beall’s lists are used to identify predatory journals included in the Research Papers in Economics archives. The affiliations of authors publishing in these outlets indicate that the geographic dispersion of authorship is widespread. A very small subset of authors is registered on RePEc. A surprising number of authors who are in the RePEc top 5% also published in predatory journals in 2015.

Signaling versus contingent contracts with costly turnover

Abstract Typical models of educational signaling assume firms are uncertain of worker ability. However, there are both theoretical and empirical problems with such models. In contrast, as in Salop and Salop [Quarterly Journal of Economics 90 (1976) 619], a model is considered in this paper in which individuals differ in the likelihood of quitting and firms are unaware of an individual’s quit propensity. Education signals one’s commitment to remain in a particular sector or occupation. Alternatively, firms may offer back-loaded wages (contingent contracts) that may avoid signaling. The analysis suggests too little signaling may occur because contingent contracts may not be socially preferable to signaling, and because individuals may prefer not to signal when signaling is efficient and contingent contracts are not chosen by firms.

Explicit labor contracts, shirking, and turnover costs

SummaryIn this paper an explanation is offered for guaranteed contracts based on turnover costs. Because workers value shirking, turnover costs are notnecessary for firms to offer these contracts: firms are willing to trade a higher level of shirking for a lower wage as long as l<T.If turnover is not costly to firms, then there is no particular reason for them to offer these contracts. The theoretical analysis suggests only that explicit contractsmay be offered if turnover is costless; the duration of these contracts with zero turnover costs may be trivial.The larger turnover costs are, thelonger the optimal explicit contract. Also, contrary to what one might assume intuitively, our analysis suggests that the longer expected work life the shorter the optimal contract.Finally, if turnover costs are sufficiently large, then an increase in contract length may be accompanied by anincrease in the contractural wage even though shirking is increased with longer contracts. Therefore, when turnover costs are significant, one may find longer contracts, higher wages, and increased shirking to be optimal.

The Cost of Specialized Human Capital

Abstract Since Gary Becker’s classic treatise Human Capital , the cost of education has generally been viewed as the sum of direct cost plus net foregone earnings—the difference between what could have been earned without attending school and what is earned while in school. However, individuals invest in specialized and not generic human capital. For some individuals, the opportunity cost of a specialized education is what could have been earned after accumulating an alternative specialized education. As demonstrated in this paper, if some individuals belong to a non-competing group , then direct schooling cost plus net foregone earnings will tend to understate the cost of education for others. The notion of a non-competing group requires that some may not be able to enter certain occupations. The human capital approach considers supply of and demand for human capital by individuals , rather than the supply of and demand for individuals with specialized human capital.