We propose to study the trade off between two incentive strategies (moni- toring and efficiency wage versus profit sharing), operated by one firm to induce more efforts among employees. We deal first with a normal context where shirkers bear the risk to be fired. We consider second a particular...

Efficiency wage effects of profit sharing are combined with option values related to stochastic future profit variations. These option effects occur if the workers' profit share is fixed by long-term contracts. The Pareto-improving optimal level of the sharing ratio is calculated for two...

Technology can affect the distribution of income directly via its influence on both the bargaining power of different parties and the marginal product of different factors of production. This paper focuses mainly on the first route. The role of power is transparent in the case of medieval choke...

The microprocessor and related technologies have transformed corporate and industry structure; applied in a neo?liberal environment, the technologies have had profound effects on the relative power of different groups. Skott and Guy (2007) and Guy and Skott (2008) formalized one aspect of this...

We analyze the link between the sustainability of bond-financed deficit policy and involuntary unemployment in an overlapping generations model incorporating the fair wage hypothesis. If the fiscal deficit policy is sustainable, reductions in bond-financed deficit increase per worker capital...

We assume a world of two countries in a fixed exchange rate system. These countries differ in the features of their labor markets. The home country is characterized by a dual labor market, with formal and informal sectors. In the foreign country, a nominal wage rigidity exists. In this context,...

This paper investigates the efficiency wage hypothesis and derives a tractable expression for the profit loss incurred by deviations from the efficiency wage. The extent of the wage deviation can be inferred from production function parameters. The resulting profit loss shown to depend upon the...

Using German establishment data, this study finds that the share of blue-collar workers, an outdated production technology and a high-wage policy increase the probability that employers regard the threat of dismissal as a suitable incentive. A participatory HRM policy, the incidence of a works...