Does this apply to academic economists? - least productive are alcoholics and the most productive workaholics? Interaction term? Read on for the abstract of the paper.
Economic Inquiry, Vol. 52, Issue 2, pp. 896-899, 2014
AARON FINKLE, Willamette University
DONGSOO SHIN, Santa Clara University - Leavey School of Business
This paper considers the role of alcohol in agency problems in order to provide an economic rationale for alcoholics and workaholics. In our model, alcohol reduces productivity, but also can make imbibers blurt private information. We show that in the optimal contract, low-productivity workers are compelled to over-indulge in alcohol, while high-productivity workers overproduce output. Thus, workers are made into “alcoholics” and “workaholics” depending on their productivity. We conclude that excessive drinking (working) may be the result, not the cause, of low (high) productivity of workers.