In a transition economy, many of employee/employer's contracts are informal, rather than formal. Even in cases when formal contracts concluded, external legal enforcement of a contract often appears to be imperfect and costly. Sometimes, this brings to the employer the opportunity to 'deceive' the employee, paying him a lower salary than he had expected ex-ante. Underdevelopment of the judiciary system and weak enforcement of courts decisions make this problem more serious, and at the same time more difficult to resolve. The current paper provides a positive model of deception at labor markets.
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Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number
03-05e.
Length: 67 pages Date of creation: 01 Jul 2003 Date of revision: Handle: RePEc:eer:wpalle:03-05e
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Find related papers by JEL classification: L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
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