610-10 - ECO610401 Monday,November17th...

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ECO 610-401 Monday, November 17 th   Organizational Design:  Centralized vs.  Decentralized Internal Labor Markets Exam Review Review Sheet Readings, Brickley et al., 12, 14  Extend Assignment #2 Due Solutions on Website Monday, November 24 th   Exam 2
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Internal Pay Markets Basic Theory equates MRP (Marginal Revenue Product)  with Wage (earnings) We have talked about a few extensions: Impacts of Training Job Market Signaling and Wages Incentive Compensation Consider more about the  Lifetime Pay Efficiency Wage Upward Sloping Wage Profiles Promotion Tournaments
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Efficiency Wages Why would a firm pay more the MRP? In what type of industries might you see this occur? When might you see it during an employee’s career?
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Employee’s Decision:  Work hard or not? Cost of working hard is $50 If employee doesn’t work hard, firm can detect with  probability of p < 1. Firm pays w
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610-10 - ECO610401 Monday,November17th...

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