The fixed wage puzzle : why profit sharing is so hard to implement

Jürgen Jerger and Jochen Michaelis

It is well known that profit sharing arrangements Pareto-dominate fixed wage contracts. Share agreements are (far) less than ubiquitous, however. This paper offers a solution of this 'fixed wage' by adopting a perspective of bounded rationality. We show that share arrangements that fulfill 'plausible' constraints are not generally acceptable to both firms and unions. -- Profit Sharing ; Share Economy ; Remuneration Systems

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Year of publication:	2010
Authors:	Jerger, Jürgen ; Michaelis, Jochen
Publisher:	Marburg : Univ., Dep. of Business Administration & Economics
Subject:	Lohnbildung \| Wage setting \| Erfolgsbeteiligung \| Profit sharing \| Tarifverhandlungen \| Collective bargaining \| Begrenzte Rationalität \| Bounded rationality \| Theorie \| Theory