1,721,015 research outputs found
Strategic debt with multi-task technologies
No full textIn this paper it is shown that when employees have ex post bargaining power, the entrepreneur will try to avoid technologies that are based on a large number of complementary tasks, we demonstrate that the entrepreneur can shelter profit from the employees' rent-seeking behaviour by raising debt. Moreover, the strategic use of debt financing can favour the adoption of technologies that rely on synergies. JEL Classification: G31, J30, L20
Bargaining Power and Wage Determination: The Role of Outside Options
No full textThe paper analyses the wage bargaining process between an entrepreneur and his workforce when delays in agreement intrinsically reduce the amount of returns to be shared It is shown that the outside options of the workforce and the entrepreneur can be a systematic determinant of their bargaining power in contrast to what the Rubinstein (1982) model predicts The basic model is extended to analyse: (i) bargaining under multiple unionism; (ii) the‐ possible relationship between bargaining and efficiency wages; and (iii) under investment in workforce training. Copyright © 1995, Wiley Blackwell. All rights reserve
Review article on "Europe and the Euro", edited by A. Alesina and F. Giavazzi, NBER, University of Chicago Press,
No full textDebt and Wage negotiations: a bankruptcy-based approach
No full textThe role of debt in wage negotiations is considered in a framework where both the entrepreneur and the workforce are indispensable in production. When workers and the entrepreneur fail to reach an agreement, the firm eventually defaults. Bankruptcy is represented as a three-party bargaining game among the entrepreneur, workers and lenders. We show that debt financing, by reducing workers' bargaining power, increases the firm's share of surplus and improves the incentives to invest. Further, our model allows for overborrowing (the firm borrows more than required by its productive activity), as well as underinvestment due to wealth constraints
Technological complexity, wage differentials and unemployment
No full textA model is developed to analyse the relation between wages and technological complexity, as characterised by the "O-ring" theory of production. In equilibrium, the adoption of a relatively complex technology induces the employer to pay higher wages. We argue that the model can explain increased within-group wage inequality as a consequence of increased technological heterogeneity among firms
Outside Options in a Bargaining Model with Decay in the Size of the Cake
No full textA simple bargaining model in which the cake decays over time at a positive rate is analysed. In the limit, the unique Perfect Equilibrium payoffs take the 'split-the-difference' form. (These results generalise to three-party bargaining)
Monetary Discipline as a Substitute for Fiscal Reforms and Market Liberalizations.
No full textIn an economy with wage-setting unions where the government has gains from redistribution, we analyze the incentive of incumbent politicians to implement monetary discipline (e.g., by joining a monetary union) against the adoption of fiscal reforms, or deregulation in product markets. We show that monetary discipline can be a "substitute" both for better (i.e., less distortionary) fiscal policies and for deregulation in product markets
Foreign debt, sanctions and investment: a model with politically-unstable Less developed Countries
No full textThis paper analyses the underinvestment problem in less developed countries (LDCs) characterized by political uncertainty. It is shown that both the strategic use of foreign debt and direct foreign investment can reduce the extent of underinvestment, determined by insecure property rights, when international sanctions are operative. In particular, foreign debt may be the most effective tool to increase the investors' share and promote physical capital accumulation. Copyright (C) 2000 John Wiley & Sons, Ltd
Amenities and skill-biased agglomeration effects: some results on Italian cities
No full textBy exploiting the Roback model, we analyze the impact of agglomeration on both production and consumption. We postulate that the evaluation of urban amenities may vary across skill-groups. Empirically, we use the Bank of Italy’s SHIW dataset, and find evidence of a substantial urban rent premium, while we do not find support for an urban wage premium. We conclude that urban agglomeration is predominantly a source of positive amenities for residents and, in particular, highly-educated individuals seem to care about the welfare effects of agglomeration more than their less-educated counterparts. Survey results also suggest that urban skilled workers benefit from jobs of higher quality, and from shopping possibilities and cultural consumption opportunities, such as cinemas, theaters, and museums
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