Aggregation with a non-convex labor supply decision, unobservable effort, and reciprocity ("gift exchange") in labor relations

Aleksandar Vasilev

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: The purpose of this note is to explore the problem of a non-convex labor supply decision in an economy with reciprocity in labor relations ("gift exchange") a la Danthine and Kurmann (2010), and explicitly perform the aggregation presented in Vasilev (2017) without a formal proof, and thus provide - starting from micro-foundations - the deriva- tion of the expected utility functions used for the aggregate household. We show how lotteries as in Rogerson (1988) can be used to convexify consumption sets, and aggre- gate over individual preferences. With a discrete labor supply decisions, the elasticity of aggregate labor supply increases from unity to infinity.

Keywords: Aggregation; Indivisible Labor; Reciprocity; Non-convexities (search for similar items in EconPapers)
JEL-codes: E1 J22 J41 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cta and nep-mac
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Related works:
Journal Article: AGGREGATION WITH A NON-CONVEX LABOUR SUPPLY DECISION, UNOBSERVABLE EFFORT, AND RECIPROCITY (“GIFT EXCHANGE”) IN LABOR RELATIONS (2018)
Journal Article: Aggregation with non-convex labor supply decision, unobservable effort, and reciprocity ("gift exchange") in labor relations (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:169418

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