Strikes and slowdown in a theory of relational contracts
| Autor: | Robert J. Gary-Bobo, Touria Jaaidane |
|---|---|
| Přispěvatelé: | Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne (UP1 UFR02), Université Paris 1 Panthéon-Sorbonne (UP1), Centre de Recherche en Économie et Statistique (CREST), Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] (ENSAI)-École polytechnique (X)-École Nationale de la Statistique et de l'Administration Économique (ENSAE Paris)-Centre National de la Recherche Scientifique (CNRS), Université de Lille, Sciences et Technologies |
| Rok vydání: | 2014 |
| Předmět: |
Economics and Econometrics
Slowdown business.industry media_common.quotation_subject Public sector Wage [SHS.ECO]Humanities and Social Sciences/Economics and Finance Outsourcing Microeconomics Political Science and International Relations Repeated game Economics Production (economics) Profitability index business Private information retrieval media_common |
| Zdroj: | European Journal of Political Economy European Journal of Political Economy, Elsevier, 2014, 36, pp.89-116. ⟨10.1016/j.ejpoleco.2014.07.002⟩ |
| ISSN: | 0176-2680 |
| Popis: | International audience; We propose a model of strikes in a relational (or self-enforcing) contract framework. The employer has private information about firm profitability, proposes a wage and a bonus, and can outsource part of the production, in each period. The union can either go on strike or reduce the worker's effort (i.e., decide a slowdown or work-to-rule) as a response to a low wage or a low bonus. We construct perfect public equilibria in which strikes (or slowdown) appear randomly on the equilibrium path, during finite-duration spells triggered by the occurrence of a low-profitability state. Equilibria exhibit money-burning (i.e., conflict) and wage-compression as in the recent literature on relational contracts; they are first-best inefficient. We discuss empirical implications of the model and applications to the public sector. Paris dustmen are taken as an illustration. An important advantage of our theory is that it allows for equilibrium regime changes, induced by changes in the environment. Following a drop in outsourcing costs, strikes may disappear and be replaced by other forms of conflict that are less easily observable. This has consequences for the empirical work on strikes |
| Databáze: | OpenAIRE |
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