Academics produce science and teaching which requires specific unobservable characteristics. Applying the multi-dimensional screening methodology of Armstrong and Rochet (European Economic Review, 43, 959–979, 1999), it is shown that universities optimally propose a menu of contracts to academics: high powered incentives for those who are productive and lower ones for other agents. In some cases, the university can write a single contract for both tasks to increase production. An academic is then expected to produce more teaching to show that she likes science, which is an argument to produce science and teaching in a single institution: universities. These results are discussed in light of economic, sociological and educational literature.
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Walckiers, A. Multi-dimensional contracts with task-specific productivity: an application to universities. Int Tax Public Finance 15, 165–198 (2008). https://doi.org/10.1007/s10797-007-9051-y
- Multi-dimensional screening
- Labor contracts