The discretionary profit in this simplified model is equal to the discretionary investment. The indifference curves are downward sloping and convex to the origin. This shows diminishing marginal rate of substitution of staff expenditure for discretionary profits. The curves are asymptotic in nature which implies that at any point of time and under any given circumstance the manager will choose positive amounts of both discretionary profits and staff expenditure. Assuming that the firm is producing an optimum level of output and the market environment is given, the discretionary profits curve is generated, shown in Fig 2. It gives the relationship between staff expenditure and discretionary profits. It can be seen from the figure that profit will be positive in the region between the points B and C. Initially with increase in profits, the staff expenditure the discretionary profits also increase, but this is only till the point Πmax, that is, till S level of staff expenditure. Beyond this if staff expenditure is increased due to increase in output, then a fall in the discretionary profits is noticed. Staff expenditure of less than B and more than C is not feasible as it wouldn't satisfy the minimum profit constraint and would in turn threaten the job security of managers. To find the equilibrium in the model, Fig 1. is superimposed on Fig 2. The equilibrium point is the point where the discretionary profit curve is tangent to the highest possible indifference curve of the manager, which is point E in Fig 3. Staying at the highest profit point would require the manager to be at a lower indifference curve "U"2. In this case the highest attainable level of utility is "U"3. At equilibrium, the level of profits would be lower but staff expenditure S* is higher than the staff expenditure made at the maximum profit point. As indifference curve is downward sloping, the equilibrium point would always be on the right of the maximum profit point. Thus the model shows the higher preference of managers for staff expenditure as compared to the discretionary investments. Radim Běleš  Radim Běleš is a Paralympic athlete from the Czech Republic competing mainly in category F51 club throwing and discus events. Běleš competed in the 2000 Summer Paralympics in the club throwing event, without winning a medal, he did however win a silver medal in that event in the 2004 Summer Paralympics where he also won the F32/51 discus. He competed at both the 2008 Summer Paralympics in Beijing and the 2012 Summer Paralympics in London, taking silver in the club throw at the latter.