Compensation and Bargaining with Entrepreneurship as the Outside Option

Erkki Koskela and R. Stenbacka

University of Helsinki, Department of Economics from Department of Economics

Abstract: We analyze the impact of entrepreneurship as an outside option on compensation contracts between a principal and an agent with bargaining power. In the first stage the parties bargain over the base wage and the profit share. In the second stage the principal determines the capital investment and the agent decides on effort.

Keywords: ENTREPRENEURSHIP; BARGAINING; LABOUR MARKET; WAGES (search for similar items in EconPapers)
JEL-codes: J24 J33 J41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2000
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Citations: View citations in EconPapers (4)

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Working Paper: Compensation and Bargaining with Entrpreneurship as the Outside Option (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:helsec:479

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