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We introduce fairness into three models of pretrial settlement and find that it increases the incidence of trial in … each. This is true despite the fact that the fairness taste parameter is common knowledge. In the standard model, the party … for fairness is reflected in the percentage of their own trial costs a party is willing to give up in accepting this final …
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to elicit the agent's private information. We establish this result by using the properties of signalling game. Finally …
Persistent link: https://www.econbiz.de/10004968420
We develop a rationale for the payment by firms of a wage premium on marginal, or overtime, weekly hours. We examine wage-hours contracts within the framework of a two-period specific human capital model with asymmetric information. The wage premium serves to achieve contract efficiency. For...
Persistent link: https://www.econbiz.de/10011335237
In the early models of incomplete contract neither party used to invest in the subject matter of the contract; those models primarily kept their focus on analyzing the effect of legal rules on parties' incentives to trade or to breach. The modern models stretched beyond that to include value...
Persistent link: https://www.econbiz.de/10012723830
We develop a rationale for the payment by firms of a wage premium on marginal, or overtime, weekly hours. We examine wage-hours contracts within the framework of a two-period specific human capital model with asymmetric information. The wage premium serves to achieve contract efficiency. For...
Persistent link: https://www.econbiz.de/10013321266
We model non-binding retail-price recommendations (RPRs) as a communication device facilitating coordination in vertical supply relations. Assuming both repeated vertical trade and asymmetric information about production costs, we show that RPRs may be part of a relational contract,...
Persistent link: https://www.econbiz.de/10003965874
This paper studies how pay transparency affects organizations that reward employees based on their efforts (i.e., using "subjective performance evaluation"). First, we show that transparency triggers social comparisons that require the organization to pay its employees an "envy premium". This...
Persistent link: https://www.econbiz.de/10012418628