Insurance-markets Equilibrium with a Non-convex Labor Supply decision, Unobservable Effort, and Incentive ("Fair") Wages

  • Aleksander VASILEV Lincoln International Business School, UK

Abstract

The purpose of this note is to describe the lottery- and insurance-market equilibrium in an economy with non-convex labor supply decision, unobservable effort, and incentive ("fair") wages. The presence of indivisible labor creates a market incompleteness, which requires that an insurance market for employment be put in operation to "complete" the market.

References

[1]. Danthine, J.-P. and Kurmann, A. (2004) "Fair wages in a New Keynesian model of the business cycle," Review of Economic Dynamics 7: 107-142.
[2]. Hansen, G. (1985) "Indivisible labor and the business cycle." Journal of Monetary Economics, Vol. 16, pp. 309-327.
[3]. Rogerson, R. (1988) "Indivisible labor, lotteries and equilibrium." Journal of Monetary Economics, Vol. 21, pp. 3-16.
[4]. Vasilev, A.Z. (2018) "Aggregation with a non-convex labor supply decision, un-observable effort, and incentive ("fair") wages," Theoretical and Practical Research in Economic Fields, Volume IX, Issue 2(18), accepted.
[5]. Vasilev, A.Z. (2017) "A Real-Business-Cycle model with reciprocity in labor relations and fical policy: the case of Bulgaria," Bulgarian Economics Papers 03-2017, Center for Economic Theories and Policies, Sofia University St. Kliment Ohridski, Sofia, Bulgaria.
Published
2019-12-31
How to Cite
VASILEV, Aleksander. Insurance-markets Equilibrium with a Non-convex Labor Supply decision, Unobservable Effort, and Incentive ("Fair") Wages. Journal of Mathematical Economics and Finance, [S.l.], v. 5, n. 2, p. 7 - 15, dec. 2019. ISSN 2458-0813. Available at: <https://journals.aserspublishing.eu/jmef/article/view/4784>. Date accessed: 06 aug. 2020. doi: https://doi.org/10.14505/jmef.v5.2(9).01.