Is perfection optimal? Employment and product market competition

Abstract: "This paper proposes a model of efficiency wage with endogenous workers flows in interaction with imperfect competition on the product markets. Subject to economy-wide shocks, firms hire and fire workers thus generating a certain turnover. We show that the intensity of this turnover negatively affects workers' incentives and induces higher efficiency wage premia. Increased competition pushes real wages up but effort incentive requirements prevent large wage adjustments. Hence, adjustments are made with quantities: both the separation and hiring rates increase with competition, increasing the wage premium and contributing to lower employment. As a consequence, an employment-maximising level of competition may exist." (author's abstract)

Object Details

• Alternative title: Funktionieren Märkte optimal? ; Wettbewerb auf Arbeits- und Produktmärkten
• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource, 18 S.
• Language: Englisch
• Notes: Veröffentlichungsversion

References and Relationships

• Bibliographic citation: Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Arbeitsmarkt und Beschäftigung, Abteilung Wirtschaftswandel und Beschäftigung ; Bd. 00-304

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Veröffentlichung
• (where): Berlin
• (when): 2000
• Creator: Amable, Bruno ; Gatti, Donatella
• Contributor: Wissenschaftszentrum Berlin für Sozialforschung gGmbH

Further information

• URN: urn:nbn:de:0168-ssoar-116369
• Rights: Open Access unbekannt; Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 15.08.2025, 7:35 AM CEST