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Profit-Sharing, Employment Efficiency and Wage Stability
Stockholms universitet.
Pennsylvania State University.
1995 (English)In: Scandinavian Journal of Economics, ISSN 0347-0520, E-ISSN 1467-9442, Vol. 97, no 2, 281-294 p.Article in journal (Refereed) Published
Abstract [en]

A contract between a risk-neutral firm and its risk-average workers is considered under uncertainty about product demand. We show that profit sharing can be used to attain the efficient level of employment and, at the same time, preserve optimal risk sharing between the parties. Optimal profit sharing does not imply wage variability; instead, wages are stabilized across states.

Place, publisher, year, edition, pages
1995. Vol. 97, no 2, 281-294 p.
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URN: urn:nbn:se:uu:diva-229557DOI: 10.2307/3440529ISI: A1995RF75800006OAI: oai:DiVA.org:uu-229557DiVA: diva2:736974
Available from: 2014-08-11 Created: 2014-08-11 Last updated: 2014-08-13Bibliographically approved

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Gottfries, Nils
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