Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25092
Authors: 
Bental, Benjamin
Demougin, Dominique M.
Year of Publication: 
2006
Series/Report no.: 
SFB 649 discussion paper 2006,009
Abstract: 
We use a static framework characterized by both moral hazard and holdup problems. In the model the optimal allocation of bargaining power balances these frictions. We examine the impact of improved monitoring on that optimal allocation and its impact upon effort, investment, profits and rents. The model's predictions are consistent with the recent evolution of labor shares, wages per efficiency units and the ratio of labor in efficiency units to capital in several OECD countries. The model suggests further that improvement in monitoring may also play a key role in understanding opposition to institutional reforms in the labor market.
Subjects: 
moral hazard
hold up
bargaining
labor share
JEL: 
D02
D24
Document Type: 
Working Paper

Files in This Item:
File
Size
455.43 kB





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