Aufsatz in einer Fachzeitschrift
The Fixed Wage Puzzle: Why Profit Sharing Is so Hard to Implement
Details zur Publikation
Autor(inn)en: | Michaelis, J.; Michaelis, J.; Jerger, J. |
Publikationsjahr: | 2011 |
Zeitschrift: | Economics Letters |
Seitenbereich: | 104-106 |
Jahrgang/Band : | 110 |
ISSN: | 0165-1765 |
DOI-Link der Erstveröffentlichung: |
Zusammenfassung, Abstract
It is well established in the literature that profit sharing arrangements Pareto-dominate fixed wage contracts. Despite this, share agreements are (far) less than ubiquitous. The present paper sheds new light on this ,,fixed wage puzzle" by adopting a perspective of bounded rationality. If firms and unions cannot fully think through all alternatives, they might impose some restrictions on the changeover to share contracts. In particular, profit sharing must not be a profit and/or wage decline. We show that these "plausible" constraints may well explain the reluctant use of share contracts.
It is well established in the literature that profit sharing arrangements Pareto-dominate fixed wage contracts. Despite this, share agreements are (far) less than ubiquitous. The present paper sheds new light on this ,,fixed wage puzzle" by adopting a perspective of bounded rationality. If firms and unions cannot fully think through all alternatives, they might impose some restrictions on the changeover to share contracts. In particular, profit sharing must not be a profit and/or wage decline. We show that these "plausible" constraints may well explain the reluctant use of share contracts.
Schlagwörter
Profit sharing, Remuneration systems, Share economy
