Insurance-markets Equilibrium with a Non-convex Labor Supply decision, Unobservable Effort, and Incentive ("Fair") Wages
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.
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. Rogerson, R. (1988) "Indivisible labor, lotteries and equilibrium." Journal of Monetary Economics, Vol. 21, pp. 3-16.
. 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.
. 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.
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