Works councils: An agency perspective

Resultado de la investigación: Contribución a RevistaArtículo

Resumen

© Revista de Economía del Rosario. Universidad del Rosario.This paper investigates the role of works councils in a simple agency framework in which works councils are supposed to monitor manager's information on behalf of the workforce, but they are independent agents who might pursue their private interest. First, we consider that workers can incentivize works councils through contingent monetary payments. In order to deter collusion, workers must pay higher compensations in states of nature where they can be expropriated by potential coalitions among works councils and management. Collusion makes contingent payments costly and reduces workers' payoffs. Second, when elections are used to align works councils' interest only well compensated representatives would face an inter-temporal trade-off between accepting management's transfers at first period and losing rents at the second period. Elections increase the cost of entering on collusive behaviour with management and works councils will try to behave on the employees' interest.
Idioma originalEnglish (US)
Páginas (desde-hasta)33-62
Número de páginas30
PublicaciónRevista de Economia del Rosario
DOI
EstadoPublished - ene 1 2014

Huella dactilar

Works councils
Workers
Collusion
Elections
Payment
Trade-offs
Rent
Employees
Managers
Costs
Workforce
Nature

Citar esto

@article{aa8f98b9c1ed4758a013623313294998,
title = "Works councils: An agency perspective",
abstract = "{\circledC} Revista de Econom{\'i}a del Rosario. Universidad del Rosario.This paper investigates the role of works councils in a simple agency framework in which works councils are supposed to monitor manager's information on behalf of the workforce, but they are independent agents who might pursue their private interest. First, we consider that workers can incentivize works councils through contingent monetary payments. In order to deter collusion, workers must pay higher compensations in states of nature where they can be expropriated by potential coalitions among works councils and management. Collusion makes contingent payments costly and reduces workers' payoffs. Second, when elections are used to align works councils' interest only well compensated representatives would face an inter-temporal trade-off between accepting management's transfers at first period and losing rents at the second period. Elections increase the cost of entering on collusive behaviour with management and works councils will try to behave on the employees' interest.",
author = "Gallego, {Juan M.}",
year = "2014",
month = "1",
day = "1",
doi = "10.12804/rev.econ.rosario.17.01.2014.02",
language = "English (US)",
pages = "33--62",
journal = "Revista de Economia del Rosario",
issn = "0123-5362",
publisher = "Universidad del Rosario",

}

Works councils: An agency perspective. / Gallego, Juan M.

En: Revista de Economia del Rosario, 01.01.2014, p. 33-62.

Resultado de la investigación: Contribución a RevistaArtículo

TY - JOUR

T1 - Works councils: An agency perspective

AU - Gallego, Juan M.

PY - 2014/1/1

Y1 - 2014/1/1

N2 - © Revista de Economía del Rosario. Universidad del Rosario.This paper investigates the role of works councils in a simple agency framework in which works councils are supposed to monitor manager's information on behalf of the workforce, but they are independent agents who might pursue their private interest. First, we consider that workers can incentivize works councils through contingent monetary payments. In order to deter collusion, workers must pay higher compensations in states of nature where they can be expropriated by potential coalitions among works councils and management. Collusion makes contingent payments costly and reduces workers' payoffs. Second, when elections are used to align works councils' interest only well compensated representatives would face an inter-temporal trade-off between accepting management's transfers at first period and losing rents at the second period. Elections increase the cost of entering on collusive behaviour with management and works councils will try to behave on the employees' interest.

AB - © Revista de Economía del Rosario. Universidad del Rosario.This paper investigates the role of works councils in a simple agency framework in which works councils are supposed to monitor manager's information on behalf of the workforce, but they are independent agents who might pursue their private interest. First, we consider that workers can incentivize works councils through contingent monetary payments. In order to deter collusion, workers must pay higher compensations in states of nature where they can be expropriated by potential coalitions among works councils and management. Collusion makes contingent payments costly and reduces workers' payoffs. Second, when elections are used to align works councils' interest only well compensated representatives would face an inter-temporal trade-off between accepting management's transfers at first period and losing rents at the second period. Elections increase the cost of entering on collusive behaviour with management and works councils will try to behave on the employees' interest.

U2 - 10.12804/rev.econ.rosario.17.01.2014.02

DO - 10.12804/rev.econ.rosario.17.01.2014.02

M3 - Article

SP - 33

EP - 62

JO - Revista de Economia del Rosario

JF - Revista de Economia del Rosario

SN - 0123-5362

ER -