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Principal-agent models take outside options, determining participation and incentive constraints, as given. We construct a general equilibrium model where workers' reservation wages and the maximum punishment acceptable before workers quit are instead determined endogenously. We simultaneously...
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, Joseph E. Stiglitz and Bruce C. Greenwald cast light on the significance of this insight for economic theory and policy …Walter Frick:[A] sweeping work of macroeconomic theory. Robert Kuttner, coeditor, The American Prospect:Joseph E …, Director, Institute of Economics, Scuola Superiore Sant'Anna:An impressive tour de force, from the theory of the firm all the …
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