The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement
AbstractIt is well known that profit sharing arrangements Pareto-dominate fixed wage contracts. Share agreements are (far) less than ubiquitous, however. This paper offers a solution of this ”fixed wage puzzle“ by adopting a perspective of bounded rationality. We show that share arrangements that fulfill ”plausible“ constraints are not generally acceptable to both firms and unions.
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Bibliographic InfoPaper provided by University of Regensburg, Department of Economics in its series University of Regensburg Working Papers in Business, Economics and Management Information Systems with number 441.
Date of creation: Apr 2010
Date of revision:
Profit Sharing; Share Economy; Remuneration Systems;
Other versions of this item:
- Jerger, Jürgen & Michaelis, Jochen, 2011. "The fixed wage puzzle: Why profit sharing is so hard to implement," Economics Letters, Elsevier, vol. 110(2), pages 104-106, February.
- Jürgen Jerger & Jochen Michaelis, 2010. "The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement," MAGKS Papers on Economics 201013, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Jürgen Jerger & Jochen Michaelis, 2010. "The Fixed Wage Puzzle : Why Profit Sharing Is So Hard to Implement," Working Papers 283, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-24 (All new papers)
- NEP-BEC-2010-07-24 (Business Economics)
- NEP-MAC-2010-07-24 (Macroeconomics)
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