Earnings, Coalitions and the Stability of the Firm Report as inadecuate




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Abstract

This paper presents an economy in which workers hired by a firm receive without cost a firm-specific training that enables them to potentially become independent producers. Thus, this specific training changes a worker-s outside option according to the firm in which he works. Under such circumstances, by modelling explicitly the workers- decision to stay or to leave the firm, the paper determines a stable arning profile of the economy. Two main results are obtained by this approach. Firstly, that such a stable earning profile can allow for a vector of wages higher than the basic neoclassical wage and for wages differentials across industries even for initially homogenous workers; secondly, that an industry equilibrium wage depends upon the relative degree of competition existing therein. Both the results seem to match labour markets empirical evidence. Furthermore, a game-theoretic framework is introduced to characterize a stable earning profile as a particular case of core of an economy with coalitions of players behaving à la Nash in the product market.



Item Type: MPRA Paper -

Original Title: Earnings, Coalitions and the Stability of the Firm-

English Title: Earnings, Coalitions and the Stability of the Firm-

Language: English-

Keywords: Wage Negotiation, Oligopoly, Coalitions, Firm-s Stability.-

Subjects: D - Microeconomics > D0 - GeneralD - Microeconomics > D2 - Production and OrganizationsD - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: TheoryD - Microeconomics > D4 - Market Structure, Pricing, and DesignD - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection-





Author: Marini, Marco A.

Source: https://mpra.ub.uni-muenchen.de/70728/







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