Monday, November 16, 2009

On Stephen Jackson

Incidentally, wouldn't it be cool if I could demand a trade from my employer?** I would insist on a warm-weather city where I could play a featured role and reunite with my college buds. I would act "disgruntled" and refuse to bill any hours until my demands are satisfied. I would be curious to see if I would be traded for a rookie fresh from law school, or a grizzled vet playing out his contract as an "of counsel".

Darn at-will employment.

As academic theorists and lay observers have noted, guaranteed contracts provide poor incentives to employees, and make it very difficult for employers to sever relations with non-performing workers. Guaranteed contracts that include provisions allowing limited firing, "for cause", inevitably give rise to costly disputes about whether the agreed-upon cause was triggered. In turn, this makes employers more reluctant ex ante to hire. Extensive due diligence on prospective employees is one partial solution to the incentive problem with guaranteed contracts; in a way, this may help to explain (to answer my blogmate's recent query) why NBA owners support the age limit. No one wants to gamble on a raw 18-year-old, hand him 10 million dollars, and see him wither away to twigs.

(**I don't mean to suggest that I am anything but content with my current employer.)

No comments: