Severance pay and the accuracy of judgment
We show that the severance pay scheme can serve as bond and improve the welfare. When the authority appropriately adjudges the worker's effort, the increase in a severance payment reduces the shirker''s expected benefit, so that the severance pay works as a bond, which is warranted by the authority.
Volume (Year): 10 (2006)
Issue (Month): 1 ()
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References listed on IDEAS
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