Abstract

http://ssrn.com/abstract=877314
 
 

References (9)



 
 

Citations (2)



 


 



Consumption Commitments and Employment Contracts, Second Version


Andrew Postlewaite


University of Pennsylvania - Department of Economics

Larry Samuelson


Yale University

Dan Silverman


University of Michigan at Ann Arbor - Economics Department; National Bureau of Economic Research (NBER)

January 14, 2006

PIER Working Paper No. 06-002

Abstract:     
We examine an economy in which the cost of consuming some goods can be reduced by making commitments that reduce flexibility. We show that such consumption commitments can induce consumers with risk-neutral underlying utility functions to be risk averse over small variations in income, but sometimes to seek risk over large variations. As a result, optimal employment contracts will smooth wages conditional on being employed, but may incorporate a possibility of unemployment.

Number of Pages in PDF File: 27

Keywords: Unemployment, consumption commitments, optimal contracts

JEL Classification: D21, D31, D81, J34

working papers series


Download This Paper

Date posted: January 20, 2006  

Suggested Citation

Postlewaite, Andrew and Samuelson, Larry and Silverman, Dan, Consumption Commitments and Employment Contracts, Second Version (January 14, 2006). PIER Working Paper No. 06-002. Available at SSRN: http://ssrn.com/abstract=877314 or http://dx.doi.org/10.2139/ssrn.877314

Contact Information

Andrew Postlewaite (Contact Author)
University of Pennsylvania - Department of Economics ( email )
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-7350 (Phone)
215-573-2057 (Fax)
HOME PAGE: http://www.econ.upenn.edu/~apostlew
Larry Samuelson
Yale University ( email )
30 Hillhouse Avenue
New Haven, CT 06520-8281
United States
Dan Silverman
University of Michigan at Ann Arbor - Economics Department ( email )
701 Tappan Street
Ann Arbor, MI 48109
United States
734-764-2447 (Phone)
734-764-2769 (Fax)
HOME PAGE: http://www.econ.lsa.umich.edu/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 592
Downloads: 40
References:  9
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.297 seconds