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Nominal Wage Contracts as a Commitment against Hyperbolic Discounting

Author

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  • Rhys ap Gwilym

    (Bangor University)

Abstract

Economic agents with hyperbolic discount functions display time inconsistent preferences. In this paper, I show that for such agents fixed nominal wage contracts may represent a welfare enhancing commitment mechanism.

Suggested Citation

  • Rhys ap Gwilym, 2010. "Nominal Wage Contracts as a Commitment against Hyperbolic Discounting," Working Papers 10014, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    • Handle: RePEc:bng:wpaper:10014
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    File URL: http://www.bangor.ac.uk/business/docs/BBSWP10014.pdf
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    References listed on IDEAS

    as
    1. Liam Graham & Dennis J. Snower, 2008. "Hyperbolic Discounting and the Phillips Curve," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(2-3), pages 427-448, March.
    2. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 443-478.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Nominal rigidities; Hyperbolic discounting;

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