Profit-Sharing, Employment Efficiency and Wage Stability
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
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.
IdentifiersURN: urn:nbn:se:uu:diva-229557DOI: 10.2307/3440529ISI: A1995RF75800006OAI: oai:DiVA.org:uu-229557DiVA: diva2:736974