The Existence of Self-Enforcing Implicit Contracts

1 February 1987

journal article
Published by Oxford University Press (OUP) in The Quarterly Journal of Economics

Vol. 102 (1) , 147-159
https://doi.org/10.2307/1884685

Abstract

Implicit contracts are nontrivial Nash equilibria to the post-hiring trading game between a worker and the employer. These are supported by intrafirm, rather than labor market, reputations. The existence of an implicit contract that supports efficient trade is proved in a simple model.

Keywords

REPUTATIONS
LABOR
MARKET
EFFICIENT
WORKER
NONTRIVIAL
INTRAFIRM
CONTRACTS IMPLICIT

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