The Fixed Wage Puzzle: Why Profit Sharing is so Hard to Implement

Osteuropa-Institut Regensburg Wirtschaftswissenschaftliche Abteilung Working Paper No. 283

13 Pages Posted: 8 Dec 2010

See all articles by Jürgen Jerger

Jürgen Jerger

Osteuropa-Institut; Chair for International and Monetary Economics

Jochen Michaelis

University of Kassel - Economics

Date Written: April 1, 2010

Abstract

It is well known that profit sharing arrangements Pareto-dominate fixed wage contracts. Share agreements are (far) less than ubiquitous, however. This paper offers a solution of this "fixed wage puzzle" by adopting a perspective of bounded rationality. We show that share arrangements that fulfill "plausible" constraints are not generally acceptable to both firms and unions.

Suggested Citation

Jerger, Jürgen and Jerger, Jürgen and Michaelis, Jochen, The Fixed Wage Puzzle: Why Profit Sharing is so Hard to Implement (April 1, 2010). Osteuropa-Institut Regensburg Wirtschaftswissenschaftliche Abteilung Working Paper No. 283, Available at SSRN: https://ssrn.com/abstract=1713745 or http://dx.doi.org/10.2139/ssrn.1713745

Jürgen Jerger (Contact Author)

Osteuropa-Institut ( email )

Landshuter Str. 4
Regensburg, 93047
Germany
+49 941 943 2697 (Phone)
+49 941 943 4941 (Fax)

HOME PAGE: http://www.osteuropa-institut.de

Chair for International and Monetary Economics ( email )

Universitaetsstrasse 31
D-93040 Regensburg
Germany
+49 941 943 2697 (Phone)
+49 941 943 4941 (Fax)

HOME PAGE: http://www.wiwi.uni-r.de/jerger

Jochen Michaelis

University of Kassel - Economics ( email )

Nora-Platiel Str. 4
34109 Kassel
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
34
Abstract Views
762
PlumX Metrics