The Efficient Mechanism for Downsizing the Public Sector
This article analyzes the efficient mechanism for downsizing the public sector, focusing on adverse selection in productive efficiency. Each worker is assumed to have two type-dependent reservation utilities: the status quo utility in the public sector before downsizing and the utility that the worker expects to obtain by entering the private sector. The efficient mechanism consists of a menu of probability (of remaining in the public sector) and transfer pairs that induces self-selection. A worker's full cost is defined by the sum of production cost in the public sector and reservation utility in the private sector. It is optimal to start by laying off the agents with higher full cost. When the public sector before downsizing is discriminating as the differential of private information about productive efficiency suggests, there are countervailing incentives. This makes the size of downsizing smaller under asymmetric information than under complete information. Copyright 1999 by Oxford University Press.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 13 (1999)
Issue (Month): 1 (January)
|Contact details of provider:|| Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK|
Phone: (202) 477-1234
Fax: 01865 267 985
Web page: http://wber.oxfordjournals.org/
More information through EDIRC
|Order Information:||Web: http://www.oup.co.uk/journals|