Anonymity, efficiency wages and technological progress

Sticky Wages, Efficiency Wages, and Market Processes

ainstream macroeconomics is in disarray. Perusal of commonly used textbooks in macroeconomics will confirm that impression without much difficulty. Unfortunately, the same statement could have been made, and often was made, fifteen years ago. While in this sense little has changed in recent years, the disarray is now more fundamental and severe than a t any time since the 1930s. Amidst this dis...

Testing For Efficiency Wages In Iran

Diversity and Technological Progress

This paper proposes a tractable model to study the equilibrium diversity of technological progress and shows that equilibrium technological progress may exhibit too little diversity (too much conformity), in particular, foregoing socially bene…cial investments in “alternative”technologies that will be used at some point in the future. The presence of future innovations that will replace current...

Workfare, Monitoring, and Efficiency Wages

The impact of a stronger work requirement for welfare recipients in a workfare program is studied in an efficiency wage model where a representative firm chooses its level of monitoring activities. A stricter workfare policy raises employment and monitoring activities. It typically increases profits and reduces the tax rate. The impact on the net wage is ambiguous. Utility levels of employed wo...

Efficiency Wages and Performance Pay

This paper studies contract selection between efficiency wages and subjective performance pay to motivate workers in a market setting. The optimal wage contract (which may be a combination of efficiency wages and subjective performance pay) is determined by turnover costs in labor markets. Specifically, labor markets with higher turnover costs use more subjective performance pay and less effici...