Listening to workers: The overtime versus hiring dilemma
To reach a certain production level, firms sometimes allow overtime and/or adjust the number of their personnel. Under some circumstances, workers can decide to work overtime to gain additional compensation, even though the firm might not need that time. This type of overtime exists because of an information asymmetry that favors workers: they know better than management the everyday routines, the temporary bottlenecks, and the malfunctions in the workplace. This study models this situation as an infinitely repeated game. In each stage-game the workers decide whether to work overtime, and the firm decides whether to adjust the amount of personnel. The game characterizes the conditions of the Nash equilibriums, some of which might lead to collaborative communication between the workers and the firm. The study empirically tests two propositions with data from a Chilean smelting plant. The results identify under which circumstances the firm should “listen” to the workers (i.e., take into account how much overtime they incur) when making personnel decisions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hart, Robert A. & Ma, Yue, 2010.
"Wage-hours contracts, overtime working and premium pay,"
Elsevier, vol. 17(1), pages 170-179, January.
- Hart, Robert A & Ma, Yue, 2008. "Wage-Hours Contracts, Overtime Working and Premium Pay," Stirling Economics Discussion Papers 2008-04, University of Stirling, Division of Economics.
- Hart, Robert A. & Ma, Yue, 2008. "Wage-Hours Contracts, Overtime Working and Premium Pay," IZA Discussion Papers 3797, Institute for the Study of Labor (IZA).
- Goux, Dominique & Maurin, Eric & Pauchet, Marianne, 2001.
"Fixed-term contracts and the dynamics of labour demand,"
European Economic Review,
Elsevier, vol. 45(3), pages 533-552, March.
- Dominique Goux & Eric Maurin & Marianne Pauchet, 1999. "Fixed-term Contracts and the Dynamics of Labour Demand," Working Papers 99-02, Centre de Recherche en Economie et Statistique.
- John T. Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2005.
"The Demand for Labor: An Analysis Using Matched Employer-Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?,"
GEMF Working Papers
2005-13, GEMF - Faculdade de Economia, Universidade de Coimbra.
- John Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2008. "The Demand for Labor: An Analysis Using Matched Employer–Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," Journal of Labor Research, Springer, vol. 29(2), pages 114-137, June.
- Addison, John T. & Bellmann, Lutz & Schank, Thorsten & Teixeira, Paulino, 2005. "The Demand for Labor: An Analysis Using Matched Employer-Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," IZA Discussion Papers 1780, Institute for the Study of Labor (IZA).
- John M. Abowd & Francis Kramarz, 1997.
"The Costs of Hiring and Separations,"
NBER Working Papers
6110, National Bureau of Economic Research, Inc.
- Baron, David P. & Besanko, David, 1984. "Regulation and information in a continuing relationship," Information Economics and Policy, Elsevier, vol. 1(3), pages 267-302.
- Charles C. Holt & Franco Modigliani & Herbert A. Simon, 1955. "A Linear Decision Rule for Production and Employment Scheduling," Management Science, INFORMS, vol. 2(1), pages 1-30, October.
- Trejo, Stephen J, 1993. "Overtime Pay, Overtime Hours, and Labor Unions," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 253-78, April.
- Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 381-402.
- Earl F. Lundgren & V. Schneider, 1971. "A Marginal Cost Model for the Hiring-Overtime Decision," Management Science, INFORMS, vol. 17(6), pages B399-B405, February.
When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:66:y:2013:i:10:p:1771-1779. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.