Basic Models

Franco Cugno and Mario Ferrero
Additional contact information
Franco Cugno: University of Torino

Chapter 3 in Share Systems and Unemployment, 1991, pp 11-33 from Palgrave Macmillan

Abstract: Abstract In this chapter we want to describe and appraise the working of a few basic types of share compensation schemes. To this purpose, we start with a classification that appears to encompass the full range of feasible types consistent with the definition of a share system we posited in Chapter 1, to the exclusion of (i) wage-discriminating arrangements à la Meade (see Chapter 9), and (ii) the free-access system (see Chapter 4). Here, then, we focus on arrangements in which equal pay for equal work prevails, workers share only in the firm’s current income, and employment and investment decisions are made by the firm alone. To put it differently, in this chapter we keep within the boundaries of Weitzman’s (1983, 1984, 1985) world, in which information is perfect, workers are neutral toward risk, insider workers have no greater bargaining power than outsiders, and the only hindrance to full employment is the existence of periodically negotiated employment contracts which fix labour compensation parameters for the time period spanned by the contract. Following Weitzman, we distinguish a ‘short’ run in which compensation parameters are quasi-fixed and only employment adjusts, and a ‘long’ run (still included, however, within the Marshallian short run, since the capital stock in every firm and the number of firms in every industry are given) in which compensation parameters are also free to adjust.

Keywords: Excess Demand; Full Employment; Marginal Revenue; Share System; Revenue Sharing (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:palchp:978-1-349-11530-3_3

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349115303

DOI: 10.1007/978-1-349-11530-3_3

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().