nep-sog New Economics Papers
on Sociology of Economics
Issue of 2009‒05‒02
one paper chosen by
Jonas Holmström
Swedish School of Economics and Business Administration

  1. Why tenure? By Cater, Bruce; Lew, Byron; Pivato, Marcus

  1. By: Cater, Bruce; Lew, Byron; Pivato, Marcus
    Abstract: Academic research is a public good whose production is supported by the tuition-paying students that a faculty's research accomplishments attract. A professor's spot contribution to the university's revenues thus depends not on her spot research production, but rather on her cumulative research record. We show that a profit-maximizing university will apply a `high' minimum retention standard to the production of a junior professor who has no record of past research, but a `zero' retention standard to the spot production of a more senior professor whose background includes accomplishments sufficient to have cleared the `high' probationary hurdle.
    Keywords: academic tenure; labour contract; up-or-out
    JEL: J41 J31
    Date: 2009–01–17

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