The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement
It is well known that profit sharing arrangements Pareto-dominate fixed wage contracts. Share agreements are (far) less than ubiquitous, however. This paper offers a solution of this ”fixed wage puzzle“ by adopting a perspective of bounded rationality. We show that share arrangements that fulfill ”plausible“ constraints are not generally acceptable to both firms and unions.
|Date of creation:||Apr 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 941 943-2392
Fax: +49 941 943-4752
Web page: http://www-wiwi.uni-regensburg.de/Email:
More information through EDIRC
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.:
- Maria Brouwer, 2005. "Managing Uncertainty through Profit Sharing Contracts from Medieval Italy to Silicon Valley," Journal of Management and Governance, Springer, vol. 9(3), pages 237-255, 09.
- Holmlund, Bertil, 1990.
"Profit Sharing, Wage Bargaining, and Unemployment,"
Western Economic Association International, vol. 28(2), pages 257-68, April.
- Kirstein, Roland & Kirstein, Annette, 2004.
"Inefficient Intra-Firm Incentives Can Stabilize Cartels in Cournot Oligopolies,"
CSLE Discussion Paper Series
2004-09, Saarland University, CSLE - Center for the Study of Law and Economics.
- Roland Kirstein & Annette Kirstein, 2007. "Inefficient Intra-Firm Incentives Can Stabilize Cartels in Cournot Oligopolies," FEMM Working Papers 07004, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-42, October.
- Erkki Koskela & Rune Stenbacka, 2006. "Flexible and Committed Profit Sharing with Wage Bargaining: Implications for Equilibrium Unemployment," Journal of Economics, Springer, vol. 87(2), pages 159-180, 03.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Juergen Schupp & Gert Wagner, 2005.
"Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey,"
2096, The Field Experiments Website.
- Dohmen, Thomas J & Falk, Armin & Huffman, David & Schupp, Jürgen & Sunde, Uwe & Wagner, Gert Georg, 2006. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," CEPR Discussion Papers 5517, C.E.P.R. Discussion Papers.
- Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," IZA Discussion Papers 1730, Institute for the Study of Labor (IZA).
- Armin Falk & David Huffman & Gert Wagner & Jurgen Schupp & Thomas Dohmen & Uwe Sunde, 2005. "Individual risk attitudes: New evidence from a large, representative, experimentally-validated survey," Framed Field Experiments 00140, The Field Experiments Website.
- Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & JÃ¼rgen Schupp & Gert G. Wagner, 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," Discussion Papers of DIW Berlin 511, DIW Berlin, German Institute for Economic Research.
- Alan Carruth & Andrew Oswald, 1984.
"Miners' Wages in Post-War Britain: An Application of a Model of Trade Union Behavior,"
558, Princeton University, Department of Economics, Industrial Relations Section..
- Carruth, Alan A & Oswald, Andrew J, 1985. "Miners' Wages in Post-war Britain: An Application of a Model of Trade Union Behaviour," Economic Journal, Royal Economic Society, vol. 95(380), pages 1003-20, December.
- Benjamin Bental & Dominique Demougin, 2003.
"Incentive Contracts and Total Factor Productivity,"
Cahiers de recherche
- Richard Watt, 2002. "Defending Expected Utility Theory: Comment," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 227-229, Spring.
- repec:feb:framed:0019 is not listed on IDEAS
- McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
- Jerger, Jurgen & Michaelis, Jochen, 1999. " Profit Sharing, Capital Formation and the NAIRU," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 257-75, June.
- Michaelis, Jochen, 1997. "On the equivalence of profit and revenue sharing," Economics Letters, Elsevier, vol. 57(1), pages 113-118, November.
When requesting a correction, please mention this item's handle: RePEc:bay:rdwiwi:14395. 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: (Gernot Deinzer)
If references are entirely missing, you can add them using this form.