Strategic Innovation with Complete and Incomplete Labour Market Contracts

Alistair Ulph and David Ulph

Scandinavian Journal of Economics, 2001, vol. 103, issue 2, 265-282

Abstract: In a model of strategic R&D competition between two firms that negotiate with independent unions we show that: (i) incomplete labour market contracts may Pareto‐dominate complete labour market contracts (ii) even when complete contracts Pareto‐dominate incomplete contracts, economies can get stuck in the incomplete contract equilibrium. These conclusions provide additional strategic reasons why complete labour market contracts may not be used—even if they were feasible. We propose two testable predictions to discriminate between complete and incomplete contracts: (i) the variance of wages is lower with complete contracts; (ii) the variance of employment is higher under complete contracts.

Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://doi.org/10.1111/1467-9442.00244

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

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:103:y:2001:i:2:p:265-282

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520

Access Statistics for this article

Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().