Implicit contract theory is used to predict the nature of optimal wage-employment contracts between a firm and a union with a utilitarian maximand, under an uncertain revenue product of labour. By allowing recruitment of outsiders in good states, and allowing unemployment of union members in bad ...
Explain the concepts of Implicit contracts. Why do employers prefer to have implicit contracts? What is the impact of implicit contracts on the unemployment rate? Explain how people make choices using marginal benefits and marginal costs. Explain the term "cost-benefit analysis" and give the sit...
An implicit contract is a theoretical construct meant to describe complex agreements, written and tacit, between employers and employees, which govern the exchange of labour services when various types of job-specific investments inhibit labour mobility and opportunities to shed risk are limited by impe...
This paper deals with a recent development in labour economics - that of implicit contract theory. A major impetus to its development has been the existence of involuntary unemployment and wage rigidity. In reality, there have been two streams of development - one associated with the name of ...
This paper deals with a recent development in labour economics - that of implicit contract theory. A major impetus to its development has been the existence of involuntary unemployment and wage rigidity. In reality, there have been two streams of development - one associated with the name of ...
Unemployment rates reached record highs. Demand for goods and services in many sectors collapsed. For example, the U.S. economy experienced two consecutive quarters of declining GDP after the peak of economic activity [31]. COVID-19 represents a type of downstream risk that has been overlooked ...