Efficiency Wages Revisited: The Internal Reference Perspective (new version)

Jean-Pierre Danthine () and Andre Kurmann ()

Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP

Abstract: The missing wage rigidity in general equilibrium models of effciency wages is an artifact of the external wage reference perspective conventionally adopted by the literature. Effciency wage models based on an internal perspective, in which the wage reference is made dependent on the firm's ability to pay, are capable of generating strong wage rigidity. This paper makes the point in the context of the gift-exchange framework originally proposed by Akerlof [1982].

Keywords: efficiency wages; wage rigidity; rent-sharing (search for similar items in EconPapers)
JEL-codes: E24 E32 J50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-lab
Date: Written 2004-06
View list of references

Published in Economics Letters, vol.90, 2006, pp. 278-284

Downloads: (external link)
http://www.hec.unil.ch/deep/textes/04.09.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP
Address: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne
Series data maintained by Claudine Delapierre Saudan ().