search query: @indexterm LABOUR MOBILITY / total: 226
reference: 42 / 226
| Author: | Tsoulouhas, T. |
| Title: | Labor and credit contracts with asymmetric information and bankruptcy |
| Journal: | European Economic Review
1996 : NOV, VOL. 40:8, p. 1665-1682 |
| Index terms: | INFORMATION LIABILITY LABOUR MOBILITY |
| Language: | eng |
| Abstract: | The paper investigates the interaction btw. a firm's contracts for labor and its contracts for credits under asymmetric information and limited liability. That is under circumstances when workers are either committed to their contracts or they lack the power to commit ex post because arbitrage opportunities are available to them. The analysis contains two main results: First, contrary to the perceptions of the limited liability literature, where limited liability is thought of causing both underemployment and income underinsurance, limited liability is in fact shown to only cause underemployment. Existence of outside sources of credit eliminates the underinsurance side of the inefficiency, but is not able to eliminate underemployment. Second, the existence of ex post arbitrage opportunities causes underinsurance. |
SCIMA