The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement

Jürgen Jerger and Jochen Michaelis (michaelis@wirtschaft.uni-kassel.de)

No 441, University of Regensburg Working Papers in Business, Economics and Management Information Systems from University of Regensburg, Department of Economics

Abstract: 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.

Keywords: Profit Sharing; Share Economy; Remuneration Systems (search for similar items in EconPapers)
JEL-codes: E24 J33 (search for similar items in EconPapers)
Date: 2010-04
New Economics Papers: this item is included in nep-bec and nep-mac
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https://epub.uni-regensburg.de/14395/1/FixedWagePuzzle_DiskBeitr_441.pdf (application/pdf)

Related works:
Journal Article: The fixed wage puzzle: Why profit sharing is so hard to implement (2011)
Working Paper: The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement (2010)
Working Paper: The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bay:rdwiwi:14395

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