Ítem
Acceso Abierto
Conflict, wages, and multiple equilibria
Título de la revista
Autores
Zuleta, Hernando
Andonova, Veneta
Fecha
2006
Directores
ISSN de la revista
Título del volumen
Editor
Universidad del Rosario
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Métricas alternativas
Resumen
Abstract
Firms’ compensation practices affect the protection of investors’ interests and the degree of economic inequality by changing the stakes of engaging in appropriation activities versus respecting the status quo. We use a general equilibrium model where workers can either work peacefully or join a guerrilla movement that expropriates entrepreneurs. If workers are peaceful, they receive a competitive wage. If they join a guerrilla movement, they receive a share of the appropriated wealth, which depends positively on the number of guerrilla members. In this framework, we find one low-income, low-wage equilibrium with guerrilla activity and one peaceful, high-income, high-wage equilibrium. The peaceful equilibrium can be reached through redistribution policies, which can be implemented at the firm level. In essence, through their compensation policies entrepreneurs, not the state might be able to protect their assets against expropriation and simultaneously control the internal principal-agent problem.
Palabras clave
Keywords
conflict , efficiency wages , general equilibrium , income distribution , multiple equilibria
Buscar en:
Zuleta, H., & Andonova, V. (2006). Conflict, wages, and multiple equilibria. Bogotá: Universidad del Rosario.
