Abstract
This note studies risk sharing in labor contracts when the price of the firm's product is uncertain. It demonstrates that if the firm adjusts employment at its own discretion, then the wage should not in general be constant, but should be constant only if the production function is of the Cobb-Douglas type.
Original language | English |
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Pages (from-to) | 181-186 |
Number of pages | 6 |
Journal | Economics Letters |
Volume | 8 |
Issue number | 2 |
DOIs | |
State | Published - 1 Jan 1981 |
Externally published | Yes |
ASJC Scopus subject areas
- Finance
- Economics and Econometrics