Workers versus Firms: Bargaining over a Firm's Value
AbstractWe introduce a distinction between a firm and its network of workers. In a competitive world, if networks are easily lured away, the workers must receive the entire value of their contribution to the firm. How then can service firms have equity value? A model is analyzed in which workers are paid less as a group than their value, even in a competitive world. The workers are assumed to have a nonwage benefit for working at the current firm; this benefit is privately known. These privately known benefits make it impossible for the workers to agree on a division of their value should they leave the existing firm for a new enterprise. The result is that the workers may receive a total compensation that is less than their contribution to the firm. Copyright 1990 by The Review of Economic Studies Limited.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Economic Studies.
Volume (Year): 57 (1990)
Issue (Month): 3 (July)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Raghuram G. Rajan & Luigi Zingales, 2000.
"The Firm as a Dedicated Hierarchy: A Theory of the Origin and Growth of Firms,"
NBER Working Papers
7546, National Bureau of Economic Research, Inc.
- Raghuram G. Rajan & Luigi Zingales, 2001. "The Firm As A Dedicated Hierarchy: A Theory Of The Origins And Growth Of Firms," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 805-851, August.
- Devereux, Paul J & Hart, Robert A & Roberts, J Elizabeth, 2013.
"Job spells, employer spells, and wage returns to tenure,"
Stirling Economics Discussion Papers
2013-01, University of Stirling, Division of Economics.
- Devereux, Paul J. & Hart, Robert A. & Roberts, J. Elizabeth, 2013. "Job Spells, Employer Spells, and Wage Returns to Tenure," IZA Discussion Papers 7384, Institute for the Study of Labor (IZA).
- Marco, Marini, 1997.
"Managers Compensation and Collusive Behaviour under Cournot Oligopoly,"
31871, University Library of Munich, Germany.
- MARINI, Marco, 1998. "Managers compensation and collusive behaviour under Cournot oligopoly," CORE Discussion Papers 1998002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Nabil I. Al-Najjar & Chris Forman, 1999. "Reciprocity and the Costs of Authority Relationships," Discussion Papers 1281, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Faria, Andre L., 2008. "Mergers and the market for organization capital," Journal of Economic Theory, Elsevier, vol. 138(1), pages 71-100, January.
- Peter Norman, 2004.
"Efficient Mechanisms for Public Goods with Use Exclusions,"
Review of Economic Studies,
Wiley Blackwell, vol. 71(4), pages 1163-1188, October.
- Norman,P., 2000. "Efficient mechanisms for public goods with use exclusions," Working papers 15, Wisconsin Madison - Social Systems.
- Han Kim, E & Morse, Adair & Zingales, Luigi, 2006.
"Are Elite Universities Losing their Competitive Edge?,"
CEPR Discussion Papers
5700, C.E.P.R. Discussion Papers.
- Kim, E. Han & Morse, Adair & Zingales, Luigi, 2009. "Are elite universities losing their competitive edge?," Journal of Financial Economics, Elsevier, vol. 93(3), pages 353-381, September.
- E. Han Kim & Adair Morse & Luigi Zingales, 2006. "Are Elite Universities Losing Their Competitive Edge?," NBER Working Papers 12245, National Bureau of Economic Research, Inc.
- Erik Brynjolffson, 1991.
"An Incomplete Contracts Theory of Information, Technology and Organization,"
Working Paper Series
126, MIT Center for Coordination Science.
- Brynjolfsson, Erik., 1991. "An incomplete contracts theory of information, technology and organization," Working papers #126. Working paper (Sloa, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- T. Ramamohan Rao, 1992. "Efficiency and equity in dynamic principal-agent problems," Journal of Economics, Springer, vol. 55(1), pages 17-41, February.
- Varoufakis, Yanis, 1996. "Bargaining and strikes: Towards an evolutionary framework," Labour Economics, Elsevier, vol. 3(4), pages 385-398, December.
- Boyan Jovanovic & Serguey Braguinsky, 2002.
"Bidder Discounts and Target Premia in Takeovers,"
NBER Working Papers
9009, National Bureau of Economic Research, Inc.
- Mumcu, Ayşe, 1999. "Firm-Specific Skills, Wage Bargaining, and Efficiency," MPRA Paper 1913, University Library of Munich, Germany.
- David Porter & Jean-Laurent Rosenthal, 1989. "The Scope of Bargaining Failures With Complete Information," UCLA Economics Working Papers 564, UCLA Department of Economics.
- Dearden, James A., 1997. "Efficiency and exclusion in collective action allocations," Mathematical Social Sciences, Elsevier, vol. 34(2), pages 153-174, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.