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
Publisher:	Marburg : Philipps-University Marburg, Faculty of Business Administration and Economics
Subject:	Lohnbildung \| Erfolgsbeteiligung \| Lohnverhandlungen \| Beschränkte Rationalität \| Theorie \| profit sharing \| share economy \| remuneration systems

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Series:	MAGKS Joint Discussion Paper Series in Economics ; 13-2010
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	623861259 [GVK] hdl:10419/56587 [Handle]
Classification:	E24 - Employment; Unemployment; Wages ; J33 - Compensation Packages; Payment Methods
Source:	EconStor

Persistent link: https://www.econbiz.de/10010290027