Self-Enforcing Wage Contracts Export

@article{citeulike:1025488, abstract = {We examine long-term wage contracts between a risk-neutral firm and a risk-averse worker when both can costlessly renege and buy or sell labour at a random spot market wage. A self-enforcing contract is one in which neither party ever has an incentive to renege. In the optimum self-enforcing contract, wages are sticky: they are less variable than spot market wages and positively serially correlated. They are updated by a simple rule: around each spot wage is a time invariant interval, and the contract wage changes each period by the smallest amount necessary to bring it into the current interval.}, author = {Thomas, Jonathan and Worrall, Tim}, citeulike-article-id = {1025488}, citeulike-linkout-0 = {http://www.jstor.org/stable/2297404}, journal = {The Review of Economic Studies}, keywords = {411-2, contracts}, number = {4}, pages = {541--553}, posted-at = {2007-01-04 21:43:27}, priority = {2}, title = {Self-Enforcing Wage Contracts}, url = {http://www.jstor.org/stable/2297404}, volume = {55}, year = {1988} }

TY - JOUR ID - citeulike:1025488 L3 - citeulike-article-id:1025488 N2 - We examine long-term wage contracts between a risk-neutral firm and a risk-averse worker when both can costlessly renege and buy or sell labour at a random spot market wage. A self-enforcing contract is one in which neither party ever has an incentive to renege. In the optimum self-enforcing contract, wages are sticky: they are less variable than spot market wages and positively serially correlated. They are updated by a simple rule: around each spot wage is a time invariant interval, and the contract wage changes each period by the smallest amount necessary to bring it into the current interval. IS - 4 JF - The Review of Economic Studies EP - 553 TI - Self-Enforcing Wage Contracts VL - 55 SP - 541 KW - 411-2 KW - contracts AU - Thomas, Jonathan AU - Worrall, Tim PY - 1988/// UR - http://www.jstor.org/stable/2297404 ER -