Friday, February 28, 2014

Research paper: "An Economic Theory of Workaholics and Alcoholics"

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

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.

No comments: