search query: @author Mailath, G. J. / total: 4
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| Author: | Mailath, G. J. Postlewaite, A. |
| Title: | Workers versus firms: bargaining over a firm's value |
| Journal: | Review of Economic Studies
1990 : JUL, VOL. 57:3, p. 369-380 |
| Index terms: | COMPANIES VALUATION BARGAINING WORKERS NETWORKS SERVICE EMPLOYEE BENEFITS COMPENSATION |
| Language: | eng |
| Abstract: | A distinction is introduced between a firm and its network of workers. In a competitive world, if networks are easily lured away, the workers must receive the entire value of their contribution to the firm. How then can service firms have equity value? A model is analysed in which workers are paid less as a group than their value, even in a competitive world. The workers are assumed to have a nonwage benefit from working for the current firm. These privately known benefits make it impossible for the workers to agree on a division of their value if they leave the existing firm for a new enterprise. The result is that the workers may receive a total compensation that is less than their contribution to the firm. |
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