In this paper we show how the information structure of employer-employee relationships, in particular - the inability of employers to costlessly observe workers' on-the-job effort, can explain involuntary unemployment' as an equilibrium phenomenon. Indeed, we show that imperfect monitoring necessitates unemployment in equilibrium
CITATION STYLE
Shapiro, C., & Stiglitz, J. E. (1984). Equilibrium as a Worker Unemployment Discipline Device. American Economic Review, 74(3), 433–444.
Mendeley helps you to discover research relevant for your work.