Weekenders and workaholics

Abstract

One reason for a worker putting in (possibly inefficiently) high levels of effort is to signal dedication, as in the conventional “rat race” literature. Where high effort levels can also be used to hide incompetence, a highly able worker might have an incentive to slack, so as to avoid being thought incompetent. A game where firms offer contracts and workers, characterised by assiduousness and ability choose observable effort levels, may have three equilibria: one where all workers put in high levels of effort, one where all put in low effort levels, and a third in which able workers put in low effort levels. The difference between a “workaholic” culture and a more relaxed one might reflect different equilibria of the same game, rather than deep cultural differences.