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

Jürgen Jerger () and Jochen Michaelis
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Jürgen Jerger: University of Regensburg and Osteuropa-Institut Regensburg

No 201013, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

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)
Pages: 12 pages
Date: 2010
New Economics Papers: this item is included in nep-bec
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https://www.uni-marburg.de/en/fb02/research-groups ... s/13-2010_jerger.pdf First version, 2010 (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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