Institutions, bargaining power and labor shares

Arbeitspapier

We use a static framework characterized by both moral hazard and holdup problems. In the model the optimal allocation of bargaining power balances these frictions. We examine the impact of improved monitoring on that optimal allocation and its impact upon effort, investment, profits and rents. The model's predictions are consistent with the recent evolution of labor shares, wages per efficiency units and the ratio of labor in efficiency units to capital in several OECD countries. The model suggests further that improvement in monitoring may also play a key role in understanding opposition to institutional reforms in the labor market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2006,009

Classification and Topics

• Classification: Wirtschaft ; Institutions: Design, Formation, Operations, and Impact ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
• Subject: moral hazard ; hold up ; bargaining ; labor share

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bental, Benjamin ; Demougin, Dominique M.
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/25092
• Last update: 10.03.2025, 11:42 AM CET