This paper provides a case study of the effect of labor relations on product quality. We consider whether a long, contentious strike and the hiring of replacement workers at Bridgestone/Firestone?s Decatur plant in the mid-1990s contributed to the production of defective tires. Using several...

Die gesetzlichen Regelungen zur betrieblichen Mitbestimmung räumen Arbeitnehmer umfangreiche Mitwirkungs- und Kontrollrechte ein. Diese Ausdünnung der Eigentumsrechte an Unternehmen ist nicht zwangsläufig ineffizient. Mitbestimmung kann auch als Sicherungsmechanismus gegen opportunistische...

This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of...

Numerous laboratory experiments show that workers reciprocate to high wages with high effort, when there is perfect information on the surplus created. Recent field experiments, however, suggest that trust and reciprocity may be lower or absent when the information is incomplete. We report a...

We develop a model of manager-employee relationships where employees care more for their manager when they are more convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways: by offering a generous wage and by giving attention....

We develop a model of manager-employee relationships where employees care more for their manager when they are more convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways: by offering a generous wage and by giving attention....