Can a merger from duopoly to monopoly be detrimental for profits? This paper deals with this issue by focusing on the interaction between decreasing returns to labour (which imply firms’ convex costs) and centralized unionization. First, it is highlighted that a wage ‘non‐rigidity’...

This paper compares macroeconomic results related to efficiency wages, contracts with bonus and tournaments in a framework with unverifiable effort. When effort is fully observable, both contracts with bonus and tournaments, unlike efficiency wages, solve the incentive problem without generating...

The paper compares different strands of New Keynesian Economics with respect to Keynes's original work on wages, describing which are the most relevant differences and analogies. In particular, two issues are analysed in detail. First, the explanations provided by Keynes and New Keynesians of...