IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/0675.html
   My bibliography  Save this paper

Wage-Employment Contracts: Global Results

Author

Listed:
  • Jerry R. Green
  • Charles M. Kahn

Abstract

This paper studies the efficient agreements about the dependence of workers' earnings on employment, when the employment level is controlled by firms. The firms ' superior information about profitability conditions is responsible for this form of contract governance. Under plausible assumptions, such agreements will cause employment to diverge from efficiency as a byproduct of their attempt to mitigate risk. It is shown that, if leisure is a normal good and firms are risk neutral, employment is always above the efficient level. Such a one-period implicit contracting model cannot, therefore, be used to "explain" unemployment as a rational byproduct of risk sharing between workers and a risk neutral firm under conditions of asymmetric information.

Suggested Citation

  • Jerry R. Green & Charles M. Kahn, 1981. "Wage-Employment Contracts: Global Results," NBER Working Papers 0675, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0675
    Note: EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w0675.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hall, Robert E & Lilien, David M, 1979. "Efficient Wage Bargains under Uncertain Supply and Demand," American Economic Review, American Economic Association, vol. 69(5), pages 868-879, December.
    2. Robert Wilson, 1977. "A Bidding Model of Perfect Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 511-518.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lazear, Edward P, 1984. "Incentives and Wage Rigidity," American Economic Review, American Economic Association, vol. 74(2), pages 339-344, May.
    2. Edward P. Lazear, 1983. "Pensions as Severance Pay," NBER Chapters, in: Financial Aspects of the United States Pension System, pages 57-90, National Bureau of Economic Research, Inc.
    3. Aba Schwartz, 1982. "The Implicit Contract Model and Labor Markets: A Critique," Discussion Papers 513, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jerry R. Green, 1981. "Wage-Employment Contracts (Replaced by W0675)," NBER Working Papers 0623, National Bureau of Economic Research, Inc.
    2. Vaccari, Federico, 2023. "Competition in costly talk," Journal of Economic Theory, Elsevier, vol. 213(C).
    3. Peter Diamond, 2011. "Unemployment, Vacancies, Wages," American Economic Review, American Economic Association, vol. 101(4), pages 1045-1072, June.
    4. Kyungmin Kim & Benjamin Lester & Braz Camargo, 2012. "Subsidizing Price Discovery," 2012 Meeting Papers 338, Society for Economic Dynamics.
    5. Knut Anton Mork & Robert E. Hall, 1980. "Energy Prices, Inflation, and Recession, 1974-1975," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 31-64.
    6. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    7. Michael Ostrovsky, 2012. "Information Aggregation in Dynamic Markets With Strategic Traders," Econometrica, Econometric Society, vol. 80(6), pages 2595-2647, November.
    8. Eric, Van den Steen, 2002. "Skill or Luck? Biases of Rational Agents," Working papers 4255-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    9. Chen Liang & Yili Hong & Pei-Yu Chen & Benjamin B. M. Shao, 2022. "The Screening Role of Design Parameters for Service Procurement Auctions in Online Service Outsourcing Platforms," Information Systems Research, INFORMS, vol. 33(4), pages 1324-1343, December.
    10. Ranaldo, Angelo & Rossi, Enzo, 2016. "Uniform-price Auctions for Swiss Government Bonds: Origin and Evolution," Working Papers on Finance 1609, University of St. Gallen, School of Finance.
    11. Dirk Alboth & Anat Lerner & Jonathan Shalev, 2001. "Profit Maximizing in Auctions of Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(4), pages 501-525, October.
    12. Jacob K. Goeree & Theo Offerman, 2003. "Competitive Bidding in Auctions with Private and Common Values," Economic Journal, Royal Economic Society, vol. 113(489), pages 598-613, July.
    13. Marc S. Robinson, 1984. "Oil Lease Auctions: Reconciling Economic Theory with Practice," UCLA Economics Working Papers 292, UCLA Department of Economics.
    14. Nicolas S. Lambert & Michael Ostrovsky & Mikhail Panov, 2018. "Strategic Trading in Informationally Complex Environments," Econometrica, Econometric Society, vol. 86(4), pages 1119-1157, July.
    15. Galit Ashkenazi-Golan & Yevgeny Tsodikovich & Yannick Viossat, 2023. "I want to tell you? Maximizing revenue in first-price two-stage auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(4), pages 1329-1362, November.
    16. Bindseil, Ulrich & Nyborg, Kjell G. & Strebulaev, Ilya A., 2002. "Bidding and performance in repo auctions: evidence from ECB open market operations," Working Paper Series 157, European Central Bank.
    17. Ronald M. Harstad, 2007. "Does a Seller Really Want Another Bidder?," Working Papers 0711, Department of Economics, University of Missouri.
    18. Christopher Boyer & B. Brorsen, 2014. "Implications of a Reserve Price in an Agent-Based Common-Value Auction," Computational Economics, Springer;Society for Computational Economics, vol. 43(1), pages 33-51, January.
    19. Jeffrey S. Zax, 1985. "Municipal Employment, Municipal Unions, and Demand for Municipal Services," NBER Working Papers 1728, National Bureau of Economic Research, Inc.
    20. Cuihong Fan & Byoung Jun & Elmar Wolfstetter, 2014. "Licensing a common value innovation when signaling strength may backfire," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(1), pages 215-244, February.
    21. Michel A. Habib & Alexandre Ziegler, 2003. "Why Government Bonds Are Sold by Auction and Corporate Bonds by Posted-Price Selling," FAME Research Paper Series rp78, International Center for Financial Asset Management and Engineering.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0675. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.