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Wage Rigidity in a Competitive Incomplete Contract Market | Semantic Scholar

@article{Fehr1999WageRI,
  title={Wage Rigidity in a Competitive Incomplete Contract Market},
  author={Ernst Fehr and Armin Falk},
  journal={Journal of Political Economy},
  year={1999},
  volume={107},
  pages={106 - 134},
  url={https://api.semanticscholar.org/CorpusID:151224626}
}

Do employers and workers underbid prevailing wages if there si unemployment? Do employers take advantage of workers' underbidding by lowering wages? Do employers take advantage of workers underbidding by lowering wages? We hypothesize that under conditions of incomplete labor contracts, wage levels may positively affect workers' propensity to cooperate. This, in turn, may prevent firms from underbidding or accepting the underbidding of workers. Experimental double auctions conducted for the…