The Pricing Paradox and Tatonnement Instability in a Wage-Maximizing Economy.

A simple model of the Arrow-Debreu type is used to analyze the short-run performance of an employee-controlled wage-maximizing economy. It is found that an increase in demand, caused by a shift in consumers' preferences, leads to a fall in a good's equilibrium price, which indicates that paradoxical short-run pricing is inherent in wage-maximization.

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Year of publication:	1999
Authors:	Suvakovic, D.
Institutions:	Groupement de Recherche en Économie Quantitative d'Aix-Marseille (GREQAM), Aix-Marseille School of Economics (AMSE)
Subject:	PRICES \| CONSUMPTION \| WAGES \| MACROECONOMICS

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Series:	G.R.E.Q.A.M..
Type of publication:	Book / Working Paper
Notes:	18 pages
Classification:	D12 - Consumer Economics: Empirical Analysis ; D51 - Exchange and Production Economies ; E13 - Neoclassical ; J54 - Producer Cooperatives; Labor Managed Firms
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005779642