Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5067048 | European Economic Review | 2012 | 16 Pages |
Abstract
⺠We analyze the optimal establishment size against the background of rent-seeking workers and the influence of works councils. ⺠Establishment size has a discouragement effect on the level of individual rent seeking but also a quantity effect. ⺠The interplay of both effects determines whether the employer chooses an inefficiently small or large establishment size. ⺠Introduction of a works council restores efficient establishment size although it is purely used as rent-seeking device. ⺠Empirically we find a dominance of the discouragement effect over the quantity effect in establishments without works council.
Related Topics
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Economics, Econometrics and Finance
Economics and Econometrics
Authors
Michael Beckmann, Matthias Kräkel,