Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273257 
Authors: 
Year of Publication: 
2008
Series/Report no.: 
Working Paper Series No. W08:05
Publisher: 
University of Iceland, Institute of Economic Studies (IoES), Reykjavik
Abstract: 
Labour demand and wages depend on the state and volatility of relationships within firms. Good relationships lower profit-maximising wages and raise firms’ profits and hence constitute an asset to the firm. Wages are lower because when people enjoy collaborating in the absence of wage incentives it is costly to induce them to work even more using such incentives due to rising marginal disutility of effort. Perhaps more surprisingly, volatile relationships among workers who collaborate raise profits and the value of workers in the presence of increasing returns to labour. Such volatility has the effect of raising the profitmaximising wage.
Subjects: 
labor demand
human capital
wage level
Work atmosphere
corporate success
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.