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We derive equilibrium delegation contracts in an international mixed duopoly with a private firm in one country and a public firm in another. We compare contracts weighting sales to those weighting relative sales. The endogenous equilibrium emerges with relative contracts chosen for both firms when the public firm's country market share is small. We compare this model to an otherwise similar domestic market with a foreign firm and to a single market without international borders. We confirm the use of delegation in all models but only the international market has both firms adopting relative sales contracts. [ABSTRACT FROM AUTHOR]

Theory suggests that when workers choose between permanent and flexible contracts, their utility should tend to equalize across contract types. New estimates of job satisfaction show the critical role played by unmeasured worker heterogeneity. They reveal that flexible contracts are a strong negative determinant of satisfaction with job security but are often a positive determinant of other dimensions of job satisfaction. As a consequence, flexible contracts have either a weak negative influence or no influence on overall job satisfaction. Moreover, flexible contracts generally have no impact on overall life satisfaction of the employed. These results appear broadly consistent with the presence of equalizing differences. (JEL J28, J41), I. INTRODUCTION This article estimates the influence of flexible--more contingent--employment contracts on job satisfaction and life satisfaction. Hedonic labor market theory suggests that workers sort across contract types maximizing their [...]

This paper is the first to examine the welfare consequences of a public firm in a traditional model of spatial price discrimination. It demonstrates that when a private firm acts as a Stackelberg location leader, the presence of a public firm always improves welfare. Moreover, when three firms locate sequentially, the presence of a public firm improves social welfare unless it locates last. Thus, despite examining a variety of location timings, including simultaneous location, privatization never improves welfare and usually harms welfare. This conclusion differs from several currently in the literature in which privatization often improves welfare. (JEL L13, L32, L33, L52), I. INTRODUCTION The idea that a public firm can regulate oligopolistic behavior dates at least to Merrill and Schneider (1966), and researchers since then have spent considerable effort isolating whether [...]

To authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-8586.2008.00301.x Byline: John S. Heywood (*), Guangliang Ye ([dagger]) Keywords: mixed duopoly; public enterprise; research and development and partial privatization Abstract: ABSTRACT This paper is the first to examine the incentive for partial privatization in a mixed duopoly with R&D rivalry. We show that because mixed duopolies engage in more R&D, the optimal extent of privatization is unambiguously reduced. Yet, this reduction is often very modest. Adopting the extent of privatization that would be optimal if one ignored the R&D rivalry routinely results in greater welfare than retaining a fully public firm and ignoring partial privatization. Only when R&D has an extremely low cost would it be preferable to ignore partial privatization. Author Affiliation: (*)Department of Economics, University of Wisconsin-Milwaukee, Milwaukee, Wisconsin, USA ([dagger])Research Institute of Economics and Management, Southwestern University of Economics and Finance, Chengdu, China Article note: Correspondence: J.S. Heywood, Department of Economics, University of Wisconsin-Milwaukee, P.O. Box 413, Milwaukee, WI 53201, USA. Email: heywood@uwm.edu. The authors thank the Scientific Research Foundation for Returned Overseas Chinese Scholars for Support.

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1475-4932.2007.00392.x Byline: SCOTT J. ADAMS (1), JOHN S. HEYWOOD (1) Keywords: J13; J33 Abstract: The factors affecting age of hiring are estimated using Australian establishment data. Lower ages of new hires are associated with training and with workplaces using steeper tenure-wage profiles. Lower ages of hires are associated with steeper profiles throughout the age of hire distribution, whereas lower ages of hires are associated with the provision of training only among younger hires. Moreover, the evidence confirms that larger employers are more likely to hire younger workers but that lower ages of hire continue to be associated with steeper tenure-wage profiles even among larger employers. The robust role of the tenure-wage profile suggests that it is too early to conclude, as some have, that specific training is the paramount reason for the reduced hiring prospects of the old. Author Affiliation: (1)Department of Economics and Graduate Program in Human Resources and Labor Relations, University of Wisconsin-Milwaukee, Milwaukee, Wisconsin, USA Article note: Correspondence: John S. Heywood, Department of Economics, University of Wisconsin-Milwaukee, PO Box 413, Milwaukee, WI 53201, USA. Email: heywood@uwm.edu

Returning to the contention that convex costs provide a resolution to the merger paradox, we show that for reasonable degrees of convexity, the minimum market share needed for merger to be profitable remains close to that associated with linear costs. Moreover, convex costs do not eliminate the free rider problem identified as part of the merger paradox. Finally, we retain convex costs while modeling a firm-by-firm sequential merger process, showing that the paradox constrains a larger share of potential mergers. These findings help reduce the relevance of convex costs as a resolution to the merger paradox. (JEL L12, L13), I. INTRODUCTION A simple canonical model published in the early 1980s suggests that mergers are rarely profitable for potential participants. Salant, Switzer, and Reynolds (1983) examined a model of n-identical [...]

The consequences of a demand constraint (low willingness to pay) are examined in a model of merger by spatial price discriminators. The imposition of a demand constraint reduces the extent of inefficiency associated with merger and also eliminates the resolution of the merger paradox obtained in the earlier, unconstrained case. Moreover, with the introduction of a demand constraint, a tax on transport cost can actually improve efficiency, which is never the case in the absence of the demand constraint. Indeed, the optimal tax often eliminates all spatial price competition by creating local monopolies. (JEL D43, L41), I. INTRODUCTION Studies of merger activity in models of spatial price discrimination conventionally assume that pricing by firms is not constrained by demand. Instead, the only constraints on the discriminatory [...]

This papers compares U.S. findings on the influence of management giving higher supplements to nonunion members when there is a threat of unionization with analysis in the UK labour market.

This paper examines the empirical determinants of piece rates and profit sharing schemes. Establishment data from Germany confirm the importance of industrial relations climate. The presence of collective agreements makes profit sharing less likely. Yet, the presence of works councils makes both piece rates and profit sharing more likely within the sector covered by collective agreements. The use of teams makes piece rates more likely within the uncovered sector. Additional hypotheses regarding expected tenure, production technology and firm strategy are confirmed. The results from Germany are explicitly compared with those from several other countries.

Alternative theories such as the discrimination in the workplace can help explain the relationship between women's employment and piece rates. Gender segregation could explain part of the relationship. This theory claims that women who worked at jobs related to their tasks at home could be paid through piece rates. Discrimination in the workplace offers another explanation in that women are paid by piece rates due to shorter employment.

A model reflects the activity between a government that maximizes tax revenue and a spatial monopolist that maximizes profit. The model assumes the government utilizes a per-unit output tax and a transport tax, while the monopolist is able to strategically change its location and mode of transport. The model demonstrates that if the government is only allowed to use one tax instrument, it would use a per-unit output tax as this forces the monopolist to use inefficient strategic choices in order to avoid profit losses.

Downstream companies can use a convex cost function to force upstream firms to lower input prices. This can be attributed to the downstream firm's capability in using wasteful technology to maximize earnings from infra-marginal units. However, the firm must face inelastic demand and must have a fixed proportion technology. The incentive for vertical control will continue if downstream marginal costs increase.

We show that couples sort on performance pay with dual receipt couples much more likely than predicted by random. In addition, we show that the return to performance pay appears largely invariant to whether one's spouse earns performance pay. The major exception is that among the college educated, the return to performance pay is larger for women when their spouse also receives performance pay. Thus, dual receipt households concentrate the returns to performance pay hinting that performance pay may influence the distribution of household income. [ABSTRACT FROM AUTHOR]

Using US panel data on young workers, we demonstrate that those who receive performance pay are more likely to consume alcohol and illicit drugs. Recognizing that this likely reflects worker sorting, we first control for risk, ability, and personality proxies. We further mitigate sorting concerns by introducing worker fixed effects, worker-employer match fixed effects, and worker-employer-occupation match fixed effects. Finally, we present fixed effect IV estimates. All of these estimates continue to indicate a greater likelihood of substance use when a worker receives performance pay. The results support conjectures that stress and effort increase with performance pay and that alcohol and drug use is a coping mechanism for workers. [ABSTRACT FROM AUTHOR]