Pal, Rupayan; Saha, Bibhas - eSocialSciences - 2010
against the high reservation wage. The entrant observes the pre-entry price, but not necessarily the wage agreements. When … wage is not observed, contracts feature over-employment. Under separating equilibrium the low type is over-employed, and … under pooling equilibrium the high type is over-employed. But when wage is observed, pooling equilibrium may not always …