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The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement

Jürgen Jerger and Jochen Michaelis

No 441, University of Regensburg Working Papers in Business, Economics and Management Information Systems from University of Regensburg, Department of Economics

Abstract: It is well known that profit sharing arrangements Pareto-dominate fixed wage contracts. Share agreements are (far) less than ubiquitous, however. This paper offers a solution of this ”fixed wage puzzle“ by adopting a perspective of bounded rationality. We show that share arrangements that fulfill ”plausible“ constraints are not generally acceptable to both firms and unions.

Keywords: Profit Sharing; Share Economy; Remuneration Systems (search for similar items in EconPapers)
JEL-codes: E24 J33 (search for similar items in EconPapers)
Date: 2010-04
New Economics Papers: this item is included in nep-bec and nep-mac
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https://epub.uni-regensburg.de/14395/1/FixedWagePuzzle_DiskBeitr_441.pdf (application/pdf)

Related works:
Journal Article: The fixed wage puzzle: Why profit sharing is so hard to implement (2011) Downloads
Working Paper: The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement (2010) Downloads
Working Paper: The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement (2010) Downloads
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