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Rent Sharing (rent + sharing)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

Relational Contracts and the Nature of Market Interactions

ECONOMETRICA, Issue 3 2004
Martin Brown
We provide evidence that long-term relationships between trading parties emerge endogenously in the absence of third party enforcement of contracts and are associated with a fundamental change in the nature of market interactions. Without third party enforcement, the vast majority of trades are initiated with private offers and the parties share the gains from trade equally. Low effort or bad quality is penalized by the termination of the relationship, wielding a powerful effect on contract enforcement. Successful long-term relations exhibit generous rent sharing and high effort (quality) from the very beginning of the relationship. In the absence of third-party enforcement, markets resemble a collection of bilateral trading islands rather than a competitive market. If contracts are third party enforceable, rent sharing and long-term relations are absent and the vast majority of trades are initiated with public offers. Most trades take place in one-shot transactions and the contracting parties are indifferent with regard to the identity of their trading partner. [source]

Do Firms Share their Success with Workers?

ECONOMICA, Issue 280 2003
The Response of Wages to Product Market Conditions
We provide new evidence that industry financial conditions help determine wages in the US manufacturing sector. Ordinary least squares estimates of the effect of rents per worker on wages are significantly positive, but quite small. We show that this may stem from econometric difficulties that plague the OLS estimates. Using the US input,output tables to isolate demand shocks, we overcome these issues and identify the effects of the industry financial situation on wages. Our IV estimates reveal substantial rent sharing,much more than is consistent with a purely competitive labour market. [source]

Warum haben wir rigide Arbeitsmärkte?

PERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 4 2001
Rent-seeking versus Soziale Sicherung
This article argues that unions, job protection, and egalitarian pay structures may have as much to do with social insurance of otherwise uninsurable risks as with rent sharing and vested interests. In support of this more benign complementary hypothesis I discuss a range of historical, theoretical, and empirical evidence. The social insurance perspective changes substantially the assessment of often-proposed reforms of European labour market institutions. The benefits from eliminating labour market rigidities have to be set against the costs of reduced cover of human capital related risk. I also argue that it is unclear whether the forces of globalisation, and the new economy, will force countries to deregulate their labour markets. [source]