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Voice and Loyalty as a Delegation of Authority: A Model and a Test on Matched Worker-Firm Panels


  • Cahuc, Pierre
  • Kramarz, Francis


The authors model a mechanism that makes delegation of authority from a firm to a collective of workers profitable. Power is exchanged for loyalty. The model is tested using a matched panel of French workers and firms. For these firms, the authors know at two dates (1986 and 1992) whether a firm-level agreement has been signed. Furthermore, at these two dates and for each firm, a representative sample of the employees provides information on the individuals. The authors show both theoretically and empirically that the voluntary signature of such an agreement induces lower employee turnover given the structure of wages. Copyright 1997 by University of Chicago Press.

Suggested Citation

  • Cahuc, Pierre & Kramarz, Francis, 1997. "Voice and Loyalty as a Delegation of Authority: A Model and a Test on Matched Worker-Firm Panels," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 658-688, October.
  • Handle: RePEc:ucp:jlabec:v:15:y:1997:i:4:p:658-88

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    References listed on IDEAS

    1. Farrell, Joseph & Gibbons, Robert, 1995. "Cheap Talk about Specific Investments," Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 313-334, October.
    2. Crawford, Vincent P & Haller, Hans, 1990. "Learning How to Cooperate: Optimal Play in Repeated Coordination Games," Econometrica, Econometric Society, vol. 58(3), pages 571-595, May.
    3. Nahum D. Melumad & Dilip Mookherjee & Stefan Reichelstein, 1995. "Hierarchical Decentralization of Incentive Contracts," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 654-672, Winter.
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    Cited by:

    1. Jacek Lewkowicz & Anna Lewczuk, 2017. "An Institutional Approach to Trade Unions’ Density. The Case of Legal Origin and Political Ideology," Working Papers 2017-06, Faculty of Economic Sciences, University of Warsaw.
    2. Andrew Hildreth & Stephen Pudney, "undated". "Econometric Issues in the Analysis of Linked Cross-Section Employer-Worker Surveys," Discussion Papers in Public Sector Economics 98/3, Department of Economics, University of Leicester.
    3. Panos, Georgios & Theodossiou, Ioannis, 2009. "Union Mediation and Adaptation to Reciprocal Loyalty Arrangements," MPRA Paper 15471, University Library of Munich, Germany.
    4. repec:eee:labchp:v:3:y:1999:i:pb:p:2629-2710 is not listed on IDEAS
    5. Kohaut Susanne & Schnabel Claus, 2003. "Tarifverträge – nein danke!? Ausmaß und Einflussfaktoren der Tarifbindung west- und ostdeutscher Betriebe / Collective Agreements - No Thanks!? Extent and Determinants of Firms’ Bargaining Coverage in," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 223(3), pages 312-331, June.
    6. Georgios A. Panos & Ioannis Theodossiou, 2013. "Reciprocal Loyalty and Union Mediation," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(3), pages 645-676, July.
    7. David Masclet, 2003. "L'analyse de l'influence de la pression des pairs dans les équipes de travail," CIRANO Working Papers 2003s-35, CIRANO.

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