The Fixed Wage Puzzle: Why Profit Sharing Is So Hard to Implement

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 puzzle“ 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.

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Year of publication:	2010
Authors:	Jerger, Jürgen ; Michaelis, Jochen
Institutions:	Volkswirtschaft Abteilung, Fachbereich Wirtschaftswissenschaften
Subject:	Profit Sharing \| Share Economy \| Remuneration Systems

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Extent:	application/pdf
Series:	MAGKS Papers on Economics.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Forthcoming in Number 201013 12 pages
Classification:	E24 - Employment; Unemployment; Wages ; J33 - Compensation Packages; Payment Methods
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008478937