In the canonical DMP model, this endogenous object is determined as the solution to a Nash bargaining problem. As such, it varies too much as Shimer pointed out, resulting in the empirical puzzle of unemployment that is not sufficiently counter-cyclical. Bewley published a s
In the canonical DMP model, this endogenous object is determined as the solution to a Nash bargaining problem. As such, it varies too much as Shimer pointed out, resulting in the empirical puzzle of unemployment that is not sufficiently counter-cyclical. Bewley published a subjective study of the empirical "stickiness" of this value, which provides some support to theoretical departures from traditional bilateral efficiency. In the models by Shapiro and Stiglitz, this value is higher than it would be in the absence of shirking, resulting in the so-called "efficiency" one of these. In such cases, piecework is an infeasible alternative to this since the value of an individual's output is likely to be subjective. For 10 points, what is this word that refers to the price of labor?
In the canonical DMP model, this endogenous object is determined as the solution to a Nash bargaining problem.
{wage}