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It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow...
Persistent link: https://www.econbiz.de/10011253051
We propose a unified framework to study relational contracting and hold-up problems in infinite horizon stochastic games. We first illustrate that with respect to long run decisions, the common formulation of relational contracts as Pareto-optimal public perfect equilibria is in stark contrast...
Persistent link: https://www.econbiz.de/10010607540
We show that if agents are risk neutral, prizes outperform wages when there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).
Persistent link: https://www.econbiz.de/10005762713
The practical and theoretical meaning of the rise and fall of new local and virtual currencies suggest that two basic theories of money both have their validity and reasons for coexistence. The drive for increasing efficiency in the payment mechanisms is in full swing and still presents many...
Persistent link: https://www.econbiz.de/10010895677
We show that if agents are risk neutral, prizes outperform wages if and only if there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).
Persistent link: https://www.econbiz.de/10009371331
valuation of each agent is private information and changes over time. At the time of contracting every agent privately observes … on the nature of the private information and the valuation process the distortion might increase or decrease over time. …
Persistent link: https://www.econbiz.de/10010933107
The set of outcomes that can arise in Bayes Nash equilibria of an incomplete information game where players may have … access to additional signals beyond the given information structure is equivalent to the set of a version of incomplete … information correlated equilibrium which we dub Bayes correlated equilibrium. A game of incomplete information can be decomposed …
Persistent link: https://www.econbiz.de/10010939338
bidder learns his true valuation, but the winning bidder's information is truncated from below. As the auction ends, the … winning bidder only has limited information, namely that his valuation is sufficiently high to win the auction. The sequential … constraints of the bidders from interim to posterior constraints. Due to the limited disclosure of information, the participation …
Persistent link: https://www.econbiz.de/10010939339
We study optimal contracting in a setting where a firm repeatedly interacts with multiple workers, and can compensate them based on publicly available performance signals as well as privately reported peer evaluations. If the evaluation and the effort provision are done by different workers (as...
Persistent link: https://www.econbiz.de/10011210467
randomly triggered spamming when recommendations are public -- as is often the case for product ratings -- and an information …
Persistent link: https://www.econbiz.de/10011272683