Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76089
Authors: 
Chen, Yu-Fu
Funke, Michael
Year of Publication: 
2002
Series/Report no.: 
CESifo Working Paper 779
Abstract: 
The standard literature on working time has modelled the decisions of firms in a deterministic framework in which firms can choose between employment and overtime (given mandated standard hours). Contrary to this approach, we follow the real options approach, which allows us to investigate the value to a firm of waiting to adjust labour when the firm‘s revenues in domestic currency are stochastic and adjustment costs are sunk. The simulations reject the null hypothesis that all exchange rate regimes obey common employment adjustment thresholds.
Subjects: 
real option theory
uncertainty
working time
employment
labour demand
exchange rates.
JEL: 
D81
E24
F31
J23
Document Type: 
Working Paper

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