IDEAS home Printed from
   My bibliography  Save this article

I vincoli al licenziamento come "commitment device" nei contratti impliciti incentivanti


  • Vincenzo Scoppa


Labor contracts establishing performance related pay incur on a firm's moral hazard problem when there are no verifiable measures of performance. Some models have explored the possibility that such contracts can be enforced through a mechanism of firm's reputation. MacLeod and Malcomson (1998) show alternatively how these contracts can be enforced thanks to the existence of an excess of demand (job vacancy) on the labor markets. However, when reputation is difficult to establish and when labor markets are in excess of supply (involuntary unemployment), these mechanisms cannot be activated. In this paper, through a simple model an alternative enforcement mechanism is proposed for performance-related pay contracts based on a widely diffused form of labor market institutional rigidity: the employment protection legislation, that is, the combination of just-cause and firing costs imposed on the firms who dismiss workers. In a game theoretical structure with repeated prisoner's dilemma, these institutional rigidities combined with intrafirm reputation act as commitment devices for the firm and allow the enforcement of implicit contracts. The market equilibrium achieved is compared with an efficiency wage equilibrium and it is showed that the latter is Pareto-dominated. The model in this way shows an efficiency-enhancing role for job security provisions in asymmetric information contexts.

Suggested Citation

  • Vincenzo Scoppa, 2001. "I vincoli al licenziamento come "commitment device" nei contratti impliciti incentivanti," Politica economica, Società editrice il Mulino, issue 1, pages 47-72.
  • Handle: RePEc:mul:je8794:doi:10.1429/1569:y:2001:i:1:p:47-72

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    File URL:
    Download Restriction: no

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


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

    Cited by:

    1. Vincenzo Scoppa, 2003. "Contratti incompleti ed enforcement endogeno. Una rassegna della letteratura," Economia politica, Società editrice il Mulino, issue 3, pages 391-440.

    More about this item


    Access and download statistics


    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:mul:je8794:doi:10.1429/1569:y:2001:i:1:p:47-72. 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: (). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.