IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v118y2013i1p167-169.html
   My bibliography  Save this article

Profit sharing and relative consumption

Author

Listed:
  • Goerke, Laszlo

Abstract

Mandatory profit sharing can represent a Pareto-improvement if labour supply is excessive due to relative consumption effects. Profit sharing reduces wages. If the rise in profit income keeps total income constant, there will only be a Pareto-improving substitution effect.

Suggested Citation

  • Goerke, Laszlo, 2013. "Profit sharing and relative consumption," Economics Letters, Elsevier, vol. 118(1), pages 167-169.
    • Handle: RePEc:eee:ecolet:v:118:y:2013:i:1:p:167-169
    DOI: 10.1016/j.econlet.2012.10.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512005551
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2012.10.012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jurgen Jerger & Jochen Michaelis, 1999. "Profit Sharing, Capital Formation and the NAIRU," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 257-275, June.
    2. Michaelis, Jochen, 1997. "On the equivalence of profit and revenue sharing," Economics Letters, Elsevier, vol. 57(1), pages 113-118, November.
    3. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    4. Francisco Alvarez-Cuadrado, 2007. "Envy, leisure, and restrictions on working hours," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1286-1310, November.
    5. Corneo, Giacomo, 2002. "The efficient side of progressive income taxation," European Economic Review, Elsevier, vol. 46(7), pages 1359-1368, July.
    6. repec:bla:scandj:v:101:y:1999:i:2:p:257-75 is not listed on IDEAS
    7. Lin, Chung-cheng & Chang, Juin-jen & Lai, Ching-chong, 2002. "Profit sharing as a worker discipline device," Economic Modelling, Elsevier, vol. 19(5), pages 815-828, November.
    8. Pierre Cahuc & Fabien Postel-Vinay, 2005. "ocial Status and the Overworked Consumer," Annals of Economics and Statistics, GENES, issue 78, pages 143-161.
    9. Jackman, Richard, 1988. "Profit-sharing in a unionised economy with imperfect competition," International Journal of Industrial Organization, Elsevier, vol. 6(1), pages 47-57, March.
    10. Weitzman, Martin L, 1985. "The Simple Macroeconomics of Profit Sharing," American Economic Review, American Economic Association, vol. 75(5), pages 937-953, December.
    11. Bill Dupor & Wen-Fang Liu, 2003. "Jealousy and Equilibrium Overconsumption," American Economic Review, American Economic Association, vol. 93(1), pages 423-428, March.
    12. repec:bla:scandj:v:97:y:1995:i:4:p:569-80 is not listed on IDEAS
    13. Georges, Christophre, 1998. "Profit-Shares, Bargaining, and Unemployment," Economic Inquiry, Western Economic Association International, vol. 36(2), pages 286-291, April.
    14. Eckalbar, John C., 1988. "Profit sharing in a competitive environment," Economic Modelling, Elsevier, vol. 5(4), pages 396-402, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bilancini, Ennio & Boncinelli, Leonardo, 2019. "Wage inequality, labor income taxes, and the notion of social status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-35.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goerke, Laszlo, 2013. "Relative consumption and tax evasion," Journal of Economic Behavior & Organization, Elsevier, vol. 87(C), pages 52-65.
    2. Goerke, Laszlo & Hillesheim, Inga, 2013. "Relative consumption, working time, and trade unions," Labour Economics, Elsevier, vol. 24(C), pages 170-179.
    3. 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.
    4. Koskela, Erkki & Stenbacka, Rune, 2012. "The relationship between product market competition and unemployment with profit sharing," Labour Economics, Elsevier, vol. 19(3), pages 291-297.
    5. Felix FitzRoy & Jim Jin & Michael Nolan, 2023. "Higher tax and less work: reverse “Keep up with the Joneses” and rising inequality," Journal of Economics, Springer, vol. 139(3), pages 177-190, August.
    6. Chia-ying Liu & Juin-jen Chang, 2011. "Macroeconomic implications of a sharing compensation scheme in a model of endogenous growth," Journal of Economics, Springer, vol. 102(1), pages 57-75, January.
    7. Francisco Alvarez-Cuadrado & Ngo Van Long, 2012. "Envy and Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 949-973, September.
    8. Yamada, Katsunori & Sato, Masayuki, 2013. "Another avenue for anatomy of income comparisons: Evidence from hypothetical choice experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 35-57.
    9. Clark, Andrew E. & Senik, Claudia & Yamada, Katsunori, 2017. "When experienced and decision utility concur: The case of income comparisons," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 70(C), pages 1-9.
    10. Thomas Aronsson & Olof Johansson-Stenman, 2014. "When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter," Economica, London School of Economics and Political Science, vol. 81(322), pages 224-243, April.
    11. Koskela, Erkki & Stenbacka, Rune, 2001. "Equilibrium unemployment with credit and labour market imperfections," Bank of Finland Research Discussion Papers 5/2001, Bank of Finland.
    12. Mauro Mastrogiacomo & Rob Euwals & Raun van Ooijen, 2010. "Private wealth and planned early retirement: A panel data analysis for the Netherlands 1994-2009," CPB Discussion Paper 160.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    13. Goerke, Laszlo & Neugart, Michael, 2017. "Social comparisons in oligopsony," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 196-209.
    14. Ed Hopkins, 2008. "Inequality, happiness and relative concerns: What actually is their relationship?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(4), pages 351-372, December.
    15. Hopkins, Ed & Kornienko, Tatiana, 2009. "Status, affluence, and inequality: Rank-based comparisons in games of status," Games and Economic Behavior, Elsevier, vol. 67(2), pages 552-568, November.
    16. Aronsson, Thomas & Johansson-Stenman, Olof, 2014. "Positional preferences in time and space: Optimal income taxation with dynamic social comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 1-23.
    17. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    18. Davis, Lewis S., 2018. "Political economy of growth with a taste for status," Journal of Public Economics, Elsevier, vol. 168(C), pages 35-46.
    19. Kazuo Mino & Yasuhiro Nakamoto, 2016. "Heterogeneous conformism and wealth distribution in a neoclassical growth model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(4), pages 689-717, October.
    20. Baumann, Florian & Friehe, Tim, 2015. "Status concerns as a motive for crime?," International Review of Law and Economics, Elsevier, vol. 43(C), pages 46-55.

    More about this item

    Keywords

    Labour supply; Profit sharing; Relative consumption; Status concerns;
    All these keywords.

    JEL classification:

    • D - Microeconomics
    • J - Labor and Demographic Economics
    • J - Labor and Demographic Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:118:y:2013:i:1:p:167-169. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.