The Workplace-Equilibrium Project: Model-Building Guidelines and Research Agenda

Abstract

This paper describes the Workplace-Equilibrium Project, which provides a home for economists interested in the formal analysis of labor pricing and use in specialized firms and economies. The Project emphasizes the unique nature of labor input, especially in the context of agency problems, and is organized around the construction and application of a rigorous model of behavior on the job, deriving the existence, stability, uniqueness, and aggregation properties of workplace equilibrium from optimizing employee-employer conduct. In the multi-faceted analysis, the workplace is understood as a venue of price-mediated exchange that is fundamentally different from the marketplace, each having distinct decision rules, constraints, and mechanisms of exchange. The Project seeks to demonstrate that formal workplace modeling usefully augments the almost exclusive focus of modern theorists on marketplace exchange, enhancing the explanatory and predictive capacities of the economic method.

Keywords: economic equibrium, wage determination, worker behavior

JEL Classification: D10, D20, D50, E10, E23, E24, J22, J30, M50