Comment on: "Centralized Bargaining and Reorganized Work: Are they Compatible?"

Ludsteck, Johannes (2003): Comment on: "Centralized Bargaining and Reorganized Work: Are they Compatible?".

Abstract

Assar Lindbeck and Denis Snower investigate the effects of multitasking and teamwork on the viability of centralised bargaining. They emphasize that workers likely have private information concerning their task mix when multitasking plays a significant role in the production process. They try to show in a formal model that only a complex remuneration scheme provides incentives for workers to choose an optimal task mix and suggest that centralized wage setting cannot tackle this complexity. We show that their remuneraton scheme is either not necessary to solve the considered information problem or not implementable.

• Item Type: MPRA Paper
• Language: English
• Keywords: reorganization, holistic firms, centralized bargaining, incentive payment
• Subjects: J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects; J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages ; Payment Methods

References

Holmstrom, Bengt (1982). Moral Hazard in Teams. Bell Journal of Economics, 13(2), 324–340.

Holmstrom, Bengt, & Milgrom, Paul (1990). Regulating Trade among Agents. Journal of Institutional and Theoretical Economics, 146, 85-107.

Lindbeck, Assar, & Snower, Denis (2001). Centralized Bargaining and Reorganized Work: Are they Compatible? European Economic Review, 45, 1851–1875.