Paper #1929

Title:

A theory of front-line management

Authors:

Daniel Bird and Alexander Frug

Date:

November 2025

Abstract:

Mid- and low-level managers play a significant role within the organizational hierarchy, far beyond monitoring. It is often their responsibility to respond to opportunities and threats within their units by adjusting their subordinates’ assignments. Most such managers, however, lack the authority to adapt their subordinates’ wages. In- stead, they rely on other, more restrictive incentive schemes. We study the interaction between a front-line manager and worker, and characterize the “managerial style” as a function of the players’ relative patience and information.

Keywords:

front-line management , perishable incentives , asymmetric discounting

JEL codes:

D21, D82, D86

Area of Research:

Microeconomics

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