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Unformatted text preview: The timing of the Frm’s decision to register or not is as follows: Stage 1 Frm decides to be registered or unregistered 2 decides how much capital to employ 3 how many labourers to employ & bargain with workers over rents Registered Frm proFts (where α ∈ [ , 1 ] denotes the relative bargaining power of the employers) · π R p r , w , θ P Unregistered Frm proFts (employers have all the bargaining power and extract all rents) U ( r , w , ) Holdup problem: Development Economics, LSE Summer School 2007 30...
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This note was uploaded on 12/29/2011 for the course ECO 307 taught by Professor Dublin during the Spring '10 term at SUNY Stony Brook.
- Spring '10