Who are more exploited, high-skilled or low-skilled workers? We address this question using the efficiency wage model with skill differentials incorporated. We perform simulations to find the Nash equilibrium numerically, and our central results are the following. First, higher-skilled workers...

Duménil, Foley and Lévy (DFL)'s note gives a formal presentation of the ‘New Interpretation’ that explicitly considers the issue of heterogeneous labour. It clarified some issues raised in my previous paper. Unfortunately, however, DFL offer only a mathematical formalism while leaving the...