Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.292936
Title: Wage determination with asymmetric information
Author: Vetter, Henrik
Awarding Body: University of Warwick
Current Institution: University of Warwick
Date of Award: 1991
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Abstract:
This thesis contains 5 independent chapters together with an Introduction and a General Conclusion. All five chapters consider the problem of wage determination in an economy characterized by asymmetric information. The solution which is implemented, for example a pair consisting of the wage and the level of employment, is restricted to elicit all possible relevant information. This forces some additional constraints upon the optimization problem of the agents. Chapters 2 and 3 demonstrate that since the firm does not voluntarily share its information with other agents, the level of employment is not efficient. In both a separating and a pooling equilibrium, underemployment is the case. Note here that the equilibrium obtained changes qualitatively from Chapter 2 to Chapter 3. We return to this in the General Conclusion. Chapter 4 elaborates upon Chapter 2. It is shown that in an otherwise competitive economy, employment and investment are lowered since they are used as signalling devices, compared to the case of symmetric and perfect information. In a model characterized by monopoly, this conclusion is no longer true. The effect upon investment is no longer unambiguous. We also return to this in the General Conclusion. Chapters 5 and 6 consider economic policy in the case of a separating, respectively, pooling equilibrium. It is shown that in the case of a separating equilibrium, taxation can improve upon the situation. For a pooling equilibrium we show the existence of multipliers. General for these models is that the introduction of asymmetric information certainly does have an effect, but also that the results are possibly non-robust to assumptions with respect to the market form.
Supervisor: Not available Sponsor: British Council
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.292936  DOI: Not available
Keywords: HB Economic Theory Labor Economics Commerce
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