Wage Rigidity and Wage Rivalry : An Oligopolistic Approach

• The aim of this paper is to present a theory of wages based on an application of oligopoly theory to labor unions, and to use this theory to explain why nominal wage rigidity in the short run does not necessarily imply money illusion or other forms of irrational behavior. Specifically, the paper shows formally that if workers are concerned about relative wages, rational behavior does not require them to demand full compensation for all price increases unless they expect all other workers to be fully compensated.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Economics

Nationalekonomi

Publikations- och innehållstyp

vet (ämneskategori)

rap (ämneskategori)