Coercion, Obnoxious Tasks, and Economic Efficiency

Incomplete contracts and inadequate enforcement of labor rights, together with the asymmetry power between a worker her employer, create an environment where employer can forcibly extract additional services (e.g. unpaid overtime or sexual favors) from beyond mutually agreed terms exchange. We show that coercive impositions co-exist voluntary transactions in labour market, positive incidence coercion adversely affect efficiency corresponding market transactions. This may justify banning legal for service if it is regarded as obnoxious by society.