Wages and employment in a repeated game with revenue fluctuations
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Empirical investigations suggests that the real wage is surprisingly flat over the business cycle. This paper analyses a repeated game between a union and a firm which can contribute to explaining the flat wage. The parties cannot enter binding contracts, and revenue is fluctuating. The paper focuses on the best subgame-perfect equilibrium among those sharing the expected surplus in given fixed shares - e.g. equal shares. It is shown that (for moderate discount factors) this equilibrium has a more counter-cyclical wage, than what would be the case if the parties shared the surplus in each period in the same shares
Originalsprog | Engelsk |
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Tidsskrift | European Economic Review |
Vol/bind | 41 |
Udgave nummer | 1 |
Sider (fra-til) | 147-162 |
ISSN | 0014-2921 |
DOI | |
Status | Udgivet - 1997 |
Bibliografisk note
JEL classifications: E3, E24, J30, J50
ID: 155833