In a paper on labor coercion in a model of this concept, Acemoglu and Wolitzky show that coercion is complementary with effort since high effort means that a rent associated with this concept must be paid more often, hence employers will use coercion to reduce this type of rent. That model is construed to apply to share-cropping, which Joseph Stiglitz showed is constrained-efficient in a principal-agent setting where this economic concept is in play, and this concept explains why efficiency wages are paid in order to prevent shirking in a model by Stiglitz and Shapiro.
In a paper on labor coercion in a model of this concept, Acemoglu and Wolitzky show that coercion is complementary with effort since high effort means that a rent associated with this concept must be paid more often, hence employers will use coercion to reduce this type of rent. That model is construed to apply to share-cropping, which Joseph Stiglitz showed is constrained-efficient in a principal-agent setting where this economic concept is in play, and this concept explains why efficiency wages are paid in order to prevent shirking in a model by Stiglitz and Shapiro. This concept is also the reason for the Volcker Rule. For 10 points, name this type of asymmetric information in which actions are hidden, which explains the willingness of financial institutions to take on risk when they are likely to be bailed out.
In a paper on labor coercion in a model of this concept, Acemoglu and Wolitzky show that coercion is complementary with effort since high effort means that a rent associated with this concept must be paid more often, hence employers will use coercion to reduce this type of rent.
moral hazard