Publications
Publications
- 2023
Leadership and the Value of Persistence
By: James J. Anton, Alan Jaske and Dennis Yao
Abstract
Consider a leader’s decision whether to persist with an unsuccessful R&D project
or to terminate the project in favor of a new project with an uncertain value. How
does that decision affect the effort exerted by the manager assigned to the project? To
study this question we build and analyze an equilibrium, infinite-horizon model which
embeds a search problem with an agency problem. We assess the policy value of a leader’s
persistence instrument under conditions of complete and incomplete information. Among
other things, we find that persistence takes advantage of a manager’s incentive to gain
access to future, potentially higher-payoff projects to induce effort on the current project.
Furthermore, when the leader has superior information about the value of the current
project, the manager may choose to delay effort to better take advantage of the information
signal provided by the leader’s persistence choice.
Keywords
Persistence; Project Evaluation; R&D Project Management; Projects; Decision Choices and Conditions; Leadership
Citation
Anton, James J., Alan Jaske, and Dennis Yao. "Leadership and the Value of Persistence." Working Paper, January 2023.