Bengt Holmstrom's paper explores how a manager's concern for future career affects their incentives to work or make decisions. The model shows that a manager's productive abilities are revealed over time through performance observations. Although there are no explicit output-based contracts, an "implicit contract" links current performance to future wages. The manager's ability and desire to influence the learning process can create an incentive problem, as they may take unobserved actions that affect current performance. The paper highlights the tension between the manager's concern for human capital returns and the firm's concern for financial returns. It shows that career motives can be beneficial or detrimental depending on how well these returns align. The paper discusses how time can affect incentives, with the intuition that time allows for more accurate inferences about unobservable behavior, thus reducing incentive costs. However, the analysis shows that transient learning effects and non-linearities in technology can lead to inefficiencies even without discounting. The paper also examines how reputation affects managerial risk-taking, showing that career concerns can create a basic incongruity in risk preferences between the manager and the firm. This can lead to inefficiencies, even in dynamic settings where time is often seen as beneficial for incentives. The paper presents a model where the manager's labor supply is influenced by the precision of information about their ability. It shows that in the stationary state, the manager's labor supply is less than the efficient level, and that the stationary level of labor supply depends on the discount rate and the degree of noise in output and ability. The paper also discusses how scale economies and non-linearities in technology can lead to inefficiencies, even in the absence of discounting. It concludes that while contracts are important for managing incentives, career concerns can lead to inefficiencies in the early stages of a manager's career and in situations where returns to ability are convex. The paper emphasizes the importance of considering dynamic perspectives in managerial incentive problems.Bengt Holmstrom's paper explores how a manager's concern for future career affects their incentives to work or make decisions. The model shows that a manager's productive abilities are revealed over time through performance observations. Although there are no explicit output-based contracts, an "implicit contract" links current performance to future wages. The manager's ability and desire to influence the learning process can create an incentive problem, as they may take unobserved actions that affect current performance. The paper highlights the tension between the manager's concern for human capital returns and the firm's concern for financial returns. It shows that career motives can be beneficial or detrimental depending on how well these returns align. The paper discusses how time can affect incentives, with the intuition that time allows for more accurate inferences about unobservable behavior, thus reducing incentive costs. However, the analysis shows that transient learning effects and non-linearities in technology can lead to inefficiencies even without discounting. The paper also examines how reputation affects managerial risk-taking, showing that career concerns can create a basic incongruity in risk preferences between the manager and the firm. This can lead to inefficiencies, even in dynamic settings where time is often seen as beneficial for incentives. The paper presents a model where the manager's labor supply is influenced by the precision of information about their ability. It shows that in the stationary state, the manager's labor supply is less than the efficient level, and that the stationary level of labor supply depends on the discount rate and the degree of noise in output and ability. The paper also discusses how scale economies and non-linearities in technology can lead to inefficiencies, even in the absence of discounting. It concludes that while contracts are important for managing incentives, career concerns can lead to inefficiencies in the early stages of a manager's career and in situations where returns to ability are convex. The paper emphasizes the importance of considering dynamic perspectives in managerial incentive problems.