Suchergebnisse

Comparisons are drawn between a socialist factory in Hungary & a capitalist machine shop in Chicago, Ill, analyzing the efficiency & productivity of both systems. The belief that state socialist factories are inefficient due to poor worker performance, aged equipment, & little reward for effort is refuted; the productivity of the Hungarian shop is argued to compare favorably with that of its Chicago counterpart. Labor-management relations are also analyzed in light of labor unions, norms, channels of grievance, & discrimination. R. McCarthy.

AbstractI use a quasi experiment, conducted in the field, to evaluate how the workers of an economic firm responded to threats to cut their piece rates. During the study, the piece rate paid to workers was initially set above the regular rate, given working conditions. In a commitment treatment this high rate was paid without any threat of revision. During a non‐commitment trial, the high rate was accompanied by a threat from management to reduce the rate if, after two days of work, average earnings were too high. The empirical results display strong ratchet effects. Workers withheld output by 16% under non‐commitment relative to commitment. The firm eventually reduced the piece rate from the initial high rate, but left it above the regular rate, giving workers the possibility to extract rents. Workers showed no tendency to restrict output during this phase of the study.

We study product market competition between firm owners (principals) where workers (agents) decide on their efforts and, hence, on output levels. Two worker compensation schemes are compared: a piece rate compensation as a benchmark when workers' output performance is verifiable, and a contest-based compensation scheme with variable, revenue-based prizes when it is only verifiable who the best performing worker is, i.e., only 'contest performance' is verifiable.Without rivalry between firms, the two compensation schemes lead to the same results. In case of product market competition, however, contest-based compensation schemes lead to more employment, more production, and lower firm profits. The reduction in profits represents the cost of being only able to verify workers' contest performance instead of output performance.

AbstractWe study product market competition between firm owners (principals) where workers (agents) decide on their efforts and, hence, on output levels. Various worker compensation schemes are compared: a piece-rate compensation as a benchmark when workers' output performance is verifiable, and different contest-based compensation schemes with fixed and variable prizes when it is only verifiable who the best performing worker is. Without rivalry between firms, all considered compensation schemes lead to the same outcome. In case of product market competition, however, a contest-based compensation scheme with revenue-dependent prizes leads to more employment, more production, and lower firm profits. The reason is that strategic interaction between the firm owners leads to an aggressive overinvestment in worker employment as well as in the revenue shares offered to the contest winners.

The paper presents an analysis of the coexistence of daily-wage and piece-rate contracts in agrarian economies. We show that, when individual effort is taken into account, daily-wage labourers typically form a convex set in the space of working ability. We also prove that, on a monopsonistic labour market, the use of both contracts in equilibrium results from the profitability of market segmentation. (DSE/DÜI)