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Acceptable Contracts, Opportunism, and Rigid Hourly Wages
Journal article   Peer reviewed

Acceptable Contracts, Opportunism, and Rigid Hourly Wages

Eastern economic journal, Vol.13(3), pp.205-213
01 Jul 1987

Abstract

Labor Economics: Theory and Empirical Studies Illustrating Theory Macroeconomics Theory of Aggregate Supply
This paper presents a model of opportunism and contingent wage schedules in labor markets, which is, in a sense, intermediate between the "implicit" and explicit contract approaches. The "expected utility" condition is not a part of the contract, but is a condition for the acceptability of a contract form by employees. Contract forms are constrained by conditions that are enforcable ex post. Of the contract forms examined, the only one mutually acceptable is one with inflexible hourly wages.

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