Optimal Labor Contracts with Asymmetric Information and More than Two Types of Agent
In the paper we discuss the optimal labor agreements between workers and firms in the situation of asymmetric information. Using a standard adverse selection model, we analyze the optimality of the labor contracts when it is the firm which has private information affecting the results of the contrac...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2012-05-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/717.pdf
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| Summary: | In the paper we discuss the optimal labor agreements
between workers and firms in the situation of asymmetric information.
Using a standard adverse selection model, we analyze the optimality of
the labor contracts when it is the firm which has private information
affecting the results of the contractual relationship. We propose an
alternative procedure to solve the optimization problem, using the
informational rents as variables. In the last part of the paper we derive
and comment the features of the optimal labor contracts in asymmetric
information. |
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| ISSN: | 1841-8678 1844-0029 |