Coercion, Obnoxious Tasks, and Economic Efficiency

Soham Baksi (), Pinaki Bose and Marc Law

Departmental Working Papers from The University of Winnipeg, Department of Economics

Abstract: Incomplete contracts and inadequate enforcement of labor rights, together with the asymmetry of power between a worker and her employer, create an environment where the employer can forcibly extract additional services (e.g. unpaid overtime or sexual favors) from the worker beyond the mutually agreed terms of exchange. We show that coercive impositions can co-exist with voluntary transactions in the labour market, and that a positive incidence of coercion can adversely affect the efficiency of the corresponding market transactions. This may justify banning the legal market for the additional service if it is regarded as "obnoxious" by society.

JEL-codes: D61 O17 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2020-07
New Economics Papers: this item is included in nep-cta
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Journal Article: Coercion, Obnoxious Tasks, and Economic Efficiency (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:win:winwop:2020-01

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