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| Author: | Matutes, C. Regibeau, P. Rockett, K. |
| Title: | Compensation schemes and labor market competition: piece rate versus wage rate |
| Journal: | Journal of Economics & Management Strategy
1994 : SUMMER, VOL. 3:2, p. 325-353 |
| Index terms: | LABOUR MARKETS COMPETITION PAY |
| Language: | eng |
| Abstract: | The authors investigate the choice of compensation scheme by firms. The basic model shows that the unique equilibrium choice for profit maximizing duopolists in a labor market is for one firm to offer a wage rate and for the other to offer a piece rate. This result arises because the firms recognize that, by offering different compensation schemes, they induce self-selection among workers , which thereby decreases the intensity of competition in the labor market. |
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