General Equilibrium in a Labor-Managed Economy with Uncertainty and Incomplete Markets
AbstractThis paper studies the free entry competitive equilibria of a labor managed economy when there are less than complete contingent claims markets. First, we prove the existence of a simple labor management equilibrium which is inefficient in the Diamond sense. Second, we introduce an insurance system internal to the firm and show that the resulting equilibrium exists and is Diamond efficient. This insurance system plays for a labor managed economy the same role as fixed obligation debt markets in an entrepreneurial stock market equilibrium.
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Bibliographic InfoArticle provided by Society for AEF in its journal Annals of Economics and Finance.
Volume (Year): 3 (2002)
Issue (Month): 1 (May)
Labor-management; Uncertainty; Incomplete markets; General equilibrium;
Find related papers by JEL classification:
- D5 - Microeconomics - - General Equilibrium and Disequilibrium
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steinar Ekern & Robert Wilson, 1974. "On the Theory of the Firm in an Economy with Incomplete Markets," Bell Journal of Economics, The RAND Corporation, vol. 5(1), pages 171-180, Spring.
- Ping Yan, 2011. "Optimal Unemployment Insurance with Endogenous Search Effort," Annals of Economics and Finance, Society for AEF, vol. 12(2), pages 347-369, November.
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