sources of intra industry wage dispersion how much do employers matter observed human capital explains less than half of wage variation in bls industry wage surveys establishment based wage differentials controlling for occupation account for 20 70 percent of intra industry wage variation this corresponds to a standard deviation in wages of 14 percent of the mean almost as large as interindustry wage variation investigation suggests that establishment wage differentials are not random variations or returns to usual measures of human capital

the consequences of minimum wage laws some new theoretical ideas economists generally agree that the effect of a binding minimum wage law is to move firms backward along the demand curve for low skill workers however this prediction of worker displacement depends critically on the assumption that the productivity of firms labor is not dependent on the wage in this paper we show that in a conventional efficiency wage model a minimum wage may increase the level of employment in low wage jobs the formal logic of our model is similar to the case of labor demand under monopsony but arises in a model with a large number of employers

portfolio optimization with tracking error constraints this article explores the risk and return relationship of active portfolios subject to a constraint on tracking error volatility tev which can also be interpreted in terms of value at risk such a constrained portfolio is the typical setup for active managers who are given the task of beating a benchmark the problem with this setup is that the portfolio manager pays no attention to total portfolio risk which results in seriously inefficient portfolios unless some additional constraints are imposed the development in this article shows that tev constrained portfolios are described by an ellipse on the traditional mean variance plane this finding yields a number of new insights because of the flat shape of this ellipse adding a constraint on total portfolio volatility can substantially improve the performance of the active portfolio in general plan sponsors should concentrate on controlling total portfolio risk

nash equilibrium efficiency wage distributions this paper extends the shirking model of efficiency wages by introducing worker heterogeneity with respect to the disutility of effort heterogeneity leads to a problem of adverse selection in addition to the moral hazard problem that is present in the original model as a result of adverse selection an equilibrium in which all firms offer the same efficiency wage cannot exist rather a continuously differentiable distribution of wages will be offered in equilibrium we demonstrate this equilibrium by construction and derive it explicitly in the case of a uniform distribution of the effort aversion parameter

environmental values and the frame of reference abstract wants may be distinguished by the extent to which they are positional positional wants are determined by one s frame of reference defined by comparison with peer group consumption and by one s own previous consumption the growth in positional wants is not uniquely related to environmental resource depletion but the two do strongly overlap several implications follow first social reductions in positional consumption may yield environmental benefits at little cost to consumers the costs are however spread over time and depend on the rate of adaptation the strength of the social reference effect determines whether individuals are subject to an isolation or an assurance problem and hence the degree to which cuts need to be centrally imposed if they are to succeed it is suggested that the negative consequences of international positioning could be ameliorated by the replacement of conventional income accounts by a welfare index that more fully incorporates environmental costs secondly the neoclassical utility function can be regarded as a special case of the reference based welfare function provided that it is restricted to positive explanations of how momentary choices are made reference based preferences have more in common with the findings of psychologists and hence open a way to consilience between economics and natural science finally the frame of reference also allows a dynamic perspective to the debate on the commensurability of wants

effects of the minimum wage on the employment status of youths an update the large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment this study produces the robust finding that when the experience of the 1980s is included a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent the lower end of the range of previous estimates because this small employment effect is offset by a labor force withdrawal effect the study finds no discernible effect on measured unemployment the study also finds no apparent effect of the minimum wage on the employment of young adults aged 20 24

estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

oligopsony and the distribution of wages we propose a simple model of wage dispersion arising from oligopsonistic competition in the labor market our model has workers who are equally able but who have heterogeneous preferences for non wage characteristics while employers have heterogeneous productivity characteristics we completely and explicitly solve for the equilibrium wage distribution and show that inside and outside forces interact in wage determination this interaction generates spillover effects of minimum wages in a manner which is consistent with the empirical evidence

supply analysis in an oligopsony model primary agricultural markets are often characterized by oligopsony this paper investigates the effect of an agricultural product supply shift on the equilibrium prices and quantities of farm products purchased by food processors and on profits of food processors the principal comparative static result indicates that under oligopsony qualitative implications of a disturbance in the supply of raw input differ from that under perfect competition and monopsony effects of other disturbances are identical in sign to the perfectly competitive case although magnitudes may differ implications for supply estimation and agricultural policy analysis are briefly discussed

unobserved ability efficiency wages and interindustry wage differentials interindustry wage differentials in wage regressions estimated for individuals have been interpreted as evidence consistent with efficiency wage models a principal competing explanation is that these differentials are generated by differences across workers in unobserved ability this paper tests the unobserved ability hypothesis by incorporating test scores into standard wage regressions as error ridden indicators of unobserved ability the results indicate that differences in unobserved ability explain relatively little of interindustry or interoccupation wage differentials this abstract was borrowed from another version of this item

robust portfolio selection using linear matrix inequalities abstract in this paper we consider the problem of robust optimal portfolio selection for tracking error when the expected returns of the risky and risk free assets as well as the covariance matrix of the risky assets are not exactly known we assume that these parameters belong to a convex polytope defined by some known elements which form the vertices of this polytope we consider two problems the first one is to find a portfolio of minimum worst case volatility of the tracking error with guaranteed fixed minimum target expected performance the second one is to find a portfolio of maximum worst case target expected performance with guaranteed fixed maximum volatility of the tracking error we show that these two problems are equivalent to solving linear matrix inequalities lmi optimization problems so that the powerful numerical packages nowadays available for this class of problems can be used a numerical example in the sao paulo stock exchange bovespa is presented

sex discrimination and competition in product and labour markets theoritical explanations for wage discrimination collapse in the long run because competition should drive discriminations firms out of the market in product markets with imperfect competition em

does ecological economics have a future contradiction and reinvention in the age of climate change abstract this paper addresses the role of neoclassical methodologies in ecological economics and the contradictions these methodologies pose to the field s critical founding principles we first consider robert costanza s treatment of nicholas stern s global deal and then survey climate change related articles published in this journal over the past five years this survey reveals how mainstream neoclassical methodologies dominate discourse and do so by marginalizing more critical political economy analyses this situation imperils the field s founding vision of a no growth steady state it also fails to address the related growth dynamics of capitalism without such a critical treatment the field s formal embrace of methodological pluralism actually entails an ideological empiricism that renders ecological economics theoretically incoherent this situation undermines the field s historical promise as an alternative economic paradigm ecological economics now faces a problematic future its survival in a form faithful to its founding vision will require an explicit choice to address its internal contradictions and reinvent itself in ways relevant to our contemporary context without such a choice ecological economics will likely succumb to an implicit acceptance of the hegemony of mainstream economic methodologies and their pro growth imperatives

an evolutionary heuristic for the index tracking problem abstract index tracking is a popular form of passive fund management the index tracking problem is the problem of reproducing the performance of a stock market index but without purchasing all of the stocks that make up the index our formulation of the problem explicitly includes transaction costs associated with buying or selling stocks and a limit on the total transaction cost that can be incurred our formulation also includes a constraint limiting the number of stocks that can be purchased an evolutionary heuristic population heuristic is presented for the solution of the index tracking problem reduction tests are also presented computational results are presented for five data sets drawn from major world markets these data sets are made publicly available for use by other workers

social comparisons in oligopsony abstract a large body of evidence suggests that social comparisons matter for workers valuation of the wage they receive the consequences of social comparisons in imperfectly competitive labor markets are less well understood we analyze an oligopsonistic model of the labor market where workers derive dis utility from comparing their own wage with wages paid at other firms as social comparisons become more prevalent all workers are paid higher wages the wage distribution becomes more equal and employment shifts to high productivity firms moreover the total wage bill and output increase while aggregate profits decline overall welfare rises our theoretical results have implications for estimating the elasticity of the labor supply curve facing a firm

anti poaching agreements in labor markets we analyze competition for experienced workers among wage setting firms the firms can design poaching offers with higher wages to workers who switch from rivals relative to wages paid to their own existing employees we evaluate the profit and welfare effects of anti poaching agreements that eliminate poaching offers as a recruiting method anti poaching agreements increase industry profits whereas workers are made worse off we show that the effects of anti poaching agreements on total welfare are determined by the magnitude of workers switching costs and the productivity change associated with switching employers jel l41 l40 j42

monopsony power in the market for nurses estimates are presented of the inverse elasticity of supply of nursing services to the individual hospital a quantity which is a natural measure of employer market power the estimates corresponding to employment changes taking place over one year are quite high in the neighborhood of 0 79 and even for changes taking place over three years are substantial in the neighborhood of 0 26 the estimates do not significantly differ for hospitals in major metropolitan areas and do not depend very sensitively on the assumed form of the oligopsony equilibrium this abstract was borrowed from another version of this item

wages profits and rent sharing the paper suggests a new test for rent sharing in the u s labor market using an unbalanced panel from the manufacturing sector it shows that a rise in a sector s profitability leads after some years to an increase in the long run level of wages in that sector the paper controls for workers characteristics for industry fixed effects and for unionism lester s range of wages is estimated for rent sharing reasons alone at approximately 24 per cent of the mean wage

optimal construction and rebalancing of index tracking portfolios abstract index funds aim to track the performance of a financial index such as e g the standard poor s 500 index index funds have become popular because they offer attractive risk return profiles at low costs the index tracking problem considered in this paper consists of rebalancing the composition of the index fund s tracking portfolio in response to new market information and cash deposits and withdrawals from investors such that the index fund s tracking accuracy is maximized in a frictionless market maximum tracking accuracy is achieved by investing the index fund s entire capital in a tracking portfolio that has the same normalized value development as the index in the presence of transaction costs which reduce the fund s capital one has to manage the trade off between transaction costs and similarity in terms of normalized value developments existing mathematical programing formulations for the index tracking problem do not optimize this trade off explicitly which may result in substantial transaction costs or tracking portfolios that differ considerably from the index in terms of normalized value development in this paper we present a mixed integer linear programing formulation with a novel optimization criterion that directly considers the trade off between transaction costs and similarity in terms of normalized value development in an experiment based on a set of real world problem instances the proposed formulation achieves a considerably higher tracking accuracy than state of the art formulations

asset allocation in a downside risk framework 1991 asset allocation in a downside risk framework financial analysts journal vol 47 no 5 pp 28 40

efficiency wages and wage dispersion the efficiency wage hypothesis has normally been used to generate an equilibrium level of unemployment the authors use it instead to generate an equilibrium wage distribution this paper starts by generalizing the previous work of r m solow in this area they then use their results on effort wage elasticities to derive a model of wage dispersion the wage rate is shown to be an increasing function of the damage potential of workers that is workers with the highest damage potential receive the highest wage the analysis of the equilibrium of the wage distribution provides interesting qualitative insights into the nature of actual wage differentials copyright 1991 by the london school of economics and political science

looking through the dataquadrate characterizing the human environment relationship through economic hedonic ecological and demographic measures abstract this paper introduces the concept of plotting four dimensional data in two dimensions without loss of information namely the dataquadrate concept here objects are represented as quadrates instead of points in a practical 4 axis cartesian coordinate system this procedure helps us imagine and analyze complex relations where four different non negative variables influence processes this tool is of high utility for analyzing specific human environment issues here we analyze a monetary measure gross domestic product gdp a hedonic measure subjective wellbeing a limiting measure ecological footprint and a demographic measure human population our system adds new insights to the de growth debate discussed in a journal of cleaner production special issue vol 18 2010 and systematically illuminates lots of confusing paradoxes such as the downward sloping part of the environmental kuznets curve the jevons paradox and the easterlin paradox in this paper all these phenomena are analyzed for the usa and for china in 1990 and in 2007 by utilizing such methodology when mitigating environmental problems we are not limited to negative restrictive messages but are enabled to create new strategic ways of problem solving about how to optimize the human celestial footprint the ratio of human wellbeing to human environmental load

inequality neighbourhoods and welfare of the poor abstract this paper investigates how neighbourhood effects interacting with income inequality affect poor people s ability to access basic facilities like health care services schooling and so on we model this interaction by integrating consumers income distribution with the spatial distribution of their location and explore the consequences of an increase in income inequality or variations in the neighbourhood characteristics on the welfare of the rich and poor in general and their access to market in particular we find that in general the impact will be non monotonic owing to an interesting trade off between the provision effect and the price effect on the one hand there is the positive provision effect higher valuation of the rich attracts the supplier to enter into the neighbourhood allowing the poor who live sufficiently close by to access the service on the other hand there is the negative price effect the service provider charges a higher price higher is the income or larger is the proportion of the rich in the neighbourhood in the extreme there exists the possibility of complete exclusion of poor from the market the service provider caters only to the rich and the poor has absolutely no market access we have identified the higher income gap between rich and poor as the key factor that exposes the poor to this complete exclusion possibility

index tracking model downside risk and non parametric kernel estimation abstract in this paper we propose an index tracking model with the conditional value at risk cvar constraint based on a non parametric kernel npk estimation framework in theory we demonstrate that the index tracking model with the cvar constraint is a convex optimization problem we then derive npk estimators for tracking errors and cvar and thereby construct the npk index tracking model monte carlo simulations show that the npk method outperforms the linear programming lp method in terms of estimation accuracy in addition the npk method can enhance computational efficiency when the sample size is large empirical tests show that the npk method can effectively control downside risk and obtain higher excess returns in both bearish and bullish market environments

a theory of dual labor markets with application to industrial policy discrimination and keynesian unemployment this paper develops a model of dual labor markets based on employers need to motivate workers in order to elicit effort from their workers employers may find it optimal to pay more than the going wage this changes fundamentally the character of labor markets the model is applied to a wide range of labor market phenomena it provides a coherent framework for understanding the claims of industrial policy advocates it also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces finally the model provides the basis for a theory of involuntary unemployment

dynamic labor market competition and wage seniority abstract we design an overlapping generations model of the labor market experienced workers bear costs of switching employers whereas the segment for junior workers is horizontally differentiated the literature typically explains wage seniority premia with reference to productivity gains generated by the accumulation of worker experience or mechanisms associated with incomplete information in contrast this paper characterizes how the wage seniority premium depends on the relative intensities of competition in the markets for junior and senior workers in particular we show that a wage seniority premium may prevail even under circumstances where senior workers are less productive than junior workers

insider forces and wage determination this paper investigates the relative importance of firm specific factors i e insider forces in wage determination using firm level data on 219 u k companies over 1974 82 it finds that a 1 percent rise in a firm s prices or productivity relative to the aggregate economy leads to a rise in relative wages of 0 1 0 2 percent as a corollary to this outside factors like the aggregate wage and the unemployment rate also play an important role there is evidence for insider based hysteresis effects but these are inversely related to the extent to which firms take national agreements into account copyright 1990 by royal economic society

monopsony power and relative wages in the labor market for nurses this paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets using data from the 1985 93 current population surveys measures of relative nurse non nurse wage rates for 252 labor markets are constructed contrary to predictions from the monopsony model no positive relationship exists between relative nursing wages and hospital density or market size nor is support found for the presence of monopsony power based on evidence on union wage premiums slopes of experience profiles or the mix of rn to total hospital employment

does unmeasured ability explain inter industry wage differentials this paper provides empirical assessments of the two leading explanations of measured inter industry wage differentials 1 true wage differentials exist across industries and 2 the measured differentials simply reflect unmeasured differences in workers productive abilities first we summarize the existing evidence on the unmeasured ability explanation second we construct a simple model which shows that if matching is important then endogenous job change decisions can create important self selection biases even in first differenced estimates of industry wage differentials third we analyze a sample that approximates the experiment of exogenous job loss we find that i the wage change experienced by a typical industry switcher closely resembles the difference in the relevant industry differentials estimated in a cross section and ii pre displacement industry affiliation plays an important role in post displacement wage determination

beyond homo economicus evidence from experimental economics environmental policies are generally based on a model of the human actor taken from neoclassical economic theory this paper reports on laboratory experiments suggesting weaknesses in this model and describes alternative models correcting these weaknesses one finding is that economic actors tend to be hyperbolic as opposed to exponential discounters who discount the immediate future at a higher rate than the more distant future another finding is that economic actors are not self regarding but rather in many circumstances are strong reciprocators who come to strategic interactions with a propensity to cooperate respond to cooperative behavior by maintaining or increasing cooperation and respond to free riders by retaliating against the offenders even at a personal cost and even when there is no reasonable expectation that future personal gains will flow from such retaliation we discuss some implications for policy analysis 2000 elsevier science b v all rights reserved

portfolio frontiers with restrictions to tracking error volatility and value at risk abstract asset managers are often given the task of restricting their activity by keeping both the value at risk var and the tracking error volatility tev under control however these constraints may be impossible to satisfy simultaneously because var is independent of the benchmark portfolio the management of these restrictions is likely to affect portfolio performance and produces a wide variety of scenarios in the risk return space the aim of this paper is to analyse various interactions between portfolio frontiers when risk managers impose joint restrictions upon tev and var specifically we provide analytical solutions for all the intersections and we propose simple numerical methods when such solutions are not available finally we introduce a new portfolio frontier

monopsony and the lifetime relation between wages and productivity we consider the relation between wages and productivity by means of a model based on the following assumptions workers live for 2 periods firms live forever senior workers differ nontrivially from junior seniority enhances workers expected second period earnings both firms and workers recognize the prospect of promotion and the senior junior wage differential at the time of hiring and firms have monopsony power in hiring junior workers we show that senior wages are equal to the senior marginal product but junior wages are set below the junior marginal product by an amount that depends on the elasticity of the firm s labor supply

minimum wages for ronald mcdonald monopsonies a theory of monopsonistic competition recent empirical work on the effects of minimum wages has called into question the conventional wisdom that minimum wages invariably reduce employment we develop a model of monopsonistic competition with free entry to analyse the effects of minimum wages and our predictions fit the empirical results closely under monopsonistic competition we find that a rise in the minimum wage raises employment per firm causes firm exit and may increase or reduce industry employment minimum wages increase welfare if they raise industry employment but welfare effects are ambiguous if employment falls

oligopsony and monopsonistic competition in labor markets we argue that models of oligopsony or monopsonistic competition provide insights and explanation for many empirical phenomena in labor markets using a simple model with job differentiation and preference heterogeneity we illustrate how such models can be employed to explain the existence of wage dispersion the persistence of labor market discrimination market failures in the provision of training and the anomalous employment effects of minimum wages

robust tracking error portfolio selection with worst case downside risk measures abstract this paper proposes downside risk measure models in portfolio selection that captures uncertainties both in distribution and in parameters the worst case distribution with given information on the mean value and the covariance matrix is used together with ellipsoidal and polytopic uncertainty sets to build up this type of downside risk model as an application of the models the tracking error portfolio selection problem is considered by lifting the vector variables to positive semidefinite matrix variables we obtain semidefinite programming formulations of the robust tracking portfolio models numerical results are presented in tracking sse50 of the shanghai stock exchange compared with the tracking error variance portfolio model and the equally weighted strategy the proposed models are more stable have better accumulated wealth and have much better sharpe ratio in the investment period for the majority of observed instances

the effects of minimum bargained wages on earnings evidence from spain abstract this paper provides an empirical evaluation of the effects of spanish sectoral collective bargaining on wages for this purpose we use a sample of workers for whom bargained wage rates and earnings are available using a variant of the meyer and wise approach we are able to estimate wage gains due to minimum bargained wages and their employment effects the most relevant conclusion is that there is evidence of a sword of justice effect by unions but this is limited by non compliance among unskilled workers and the non binding nature of bargained wages for skilled workers

the union impact on hospital wages and fringe benefits this paper uses 1977 data from a national probability sample of 1 200 hospitals to estimate the effect of unions on wages and fringe benefits in four occupations registered nurses practical nurses secretaries and housekeepers the results show that unionization has a significant impact on wages that increases with the length of time collective bargaining has been in effect at the individual hospital the overall wage effect of unions is about 8 percent for both types of nurses and 11 to 12 percent for secretaries and housekeepers employed in hospitals the authors also estimate an equation for hospital wide fringe benefits which shows that such benefits are positively related to the percent of full time employees in the four occupations covered by union contracts

seniority and monopsony in the academic labor market workers with high seniority usually have higher wages than workers with low seniority and the same total labor marke t experience in contrast the results of this paper indicate that higher seniority is associated with lower salaries for university professors the author documents this finding for national surveys a nd individual institutions and explains it as due to monopsonistic discrimination by employers copyright 1993 by american economic association

monopsony in the labor market this paper surveys recent theoretical and empirical research on monopsony in labor markets broadly defined as upward sloping labor supply to an employer we compare older monopsony models based on small numbers of employers with newer models based on labor market frictions such as moving costs and search we also compare older econometric approaches that focus on static wage concentration relationships with newer approaches that focus on dynamics our review of empirical estimates suggests that monopsony power based on small numbers of employers is probably rare but occasionally large while monopsony power based on frictions is probably widespread but small on average

does equal pay legislation reduce labour market inequality this paper considers a labour market model of monopsonistic competition with taste based discrimination against minority workers to study the effect of equal pay legislation on labour market inequality when the taste for discrimination is small or competition is weak the policy removes job segregation and the wage gap completely however with a bigger taste for discrimination or stronger competition equal pay legislation leads to more job segregation and sometimes minority workers end up earning less than before profits of discriminating firms might increase and discrimination can persist in the long run although it would have disappeared without the policy

an estimate of the rent generated by a premium college football player the national collegiate athletic association limits the payments athletes can receive for their services colleges are effectively monosony employers so players will not be paid their marginal revenue product therefore colleges capture an economic rent from players this paper measures these rents by estimating the marginal revenue product of a top college football player the empirical results suggest that a premium college player generates over 500 000 in annual revenues for his team

a model of the natural rate of unemployment since the publication of edmund phelps volume the new macroeconomics has treated the labor market as a dynamic process of rational search by unemployed workers for available vacancies wages are viewed as at least potentially flexible though free contracting between workers and firms may lead to fixed wages in the short run imperfect information is a crucial element of the theory for it implies both a need for contracting and a need for rational search rather than simple market clearing in each period a positive rate of frictional unemployment may exist in equilibrium denoted as the natural rate this unemployment is due to the frictions in the search process and imperfections in information rather than to any deficiency in aggregate demand milton friedman defined the natural rate as the level that would be ground out by the walrasian system of general equilibrium equations provided there is embedded in them the actual structural characteristics of the labor and commodity markets including market imperfections stochastic variability in demands and supplies the cost of gathering information about job vacancies and labor availabilities the costs of mobility and so on p 8 this paper reexamines the micro foundations of the natural rate in a model of labor market equilibrium in which turnover flows and imperfect information are explicitly considered workers may quit their current jobs to enter the unemployment pool in order to search among available vacancies for a more preferred position firms economize on turnover by an appropriate wage policy

climate change economics and buddhism part 2 new views and practices for sustainable world economies abstract the evidence of impending and serious climate and other consequences of an expanding world economy based on fossil carbon energy continues to accumulate this two part paper examines the potential contribution of the world view and insights of buddhism to this search it presents both a conceptual and practical case that buddhism can help shape and move towards an alternative and effective paradigmatic basis for sustainable economies one capable of bringing about and maintaining genuine high welfare levels across the world s societies the first paper outlined a comprehensive analytical framework to identify the fundamental nature of anthropogenic climate change based on the integration of two of the most influential environmental analysis tools of recent decades the dpsir model and ipat equation the framework was then broadened to facilitate ideas from the buddhist world view by injecting two key missing aspects the interrelated role of 1 beliefs and values on goals and behavior and 2 the nature of well being or human happiness finally the principal linkages between this climate change analysis framework and buddhism were explored in this concluding paper the systems framework is used to demonstrate how buddhist and related world views can feed into appropriate and effective responses to the impending challenges of climate change this is undertaken by systematically presenting a specific if indicative list of relevant strategies informed by the understanding of interconnectedness and other basic principles about the nature of reality and human well being as proposed in buddhism

the impact of the minimum wage on other wages in this paper i explore how changes in the minimum wage affect various occupational wages i postulate that other wages increase for two reasons first firms try to mitigate the deterioration in a worker s relative wage which would cause him to reduce his work effort and second there is an increase in the demand for nonminimum wage workers wage adjustment patterns are examined to ascertain whether wage comparisons play a role in the adjustment process the empirical work shows a short run wage compression among white collar occupations which is consistent with the wage comparison model however large standard errors make inferences weak

incentive fees some problems and some solutions 1987 incentive fees some problems and some solutions financial analysts journal vol 43 no 1 pp 21 26

wage differentials employer size and unemployment the unique equilibrium solution to a game in which a continuum of individual employers choose permanent wage offers and a continuum of workers search by sequentially sampling from the set of offers is characterized wage dispersion is a robust outcome provided that workers search while employed as well as when unemployed the unique nondegenerate equilibrium distribution of wage offers is constructed for three cases 1 identical workers and employers 2 identical employers and an atomless distribution of worker supply prices and 3 identical workers and an atomless distribution of job productivities copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

deep time series forecasting for enhanced index tracking we consider the problem of enhanced index tracking whose objective is to construct a portfolio that maximizes the excess return and minimizes the tracking error between the returns of the tracking

equilibrium wage distributions the observation that different firms charge different prices for what appears to be the same commodity or pay different wages for what appears to be equivalent labour has long been explained in economics by a reference to imperfect information this paper is concerned with characterising market equilibrium with imperfect information we do not present a general theory rather we develop in some detail an example of importance in its own right imperfect information in the labour market several properties of our example in particular the existence of equilibria with price wage dispersion unemployment excess supply of labour positive profits multiple equilibria and the nonoptimality or some of all of the equilibria are of more general validity other results may not be this paper is concerned with two kinds of imperfect information a individuals may not know the wage paid in any particular firm or whether there is a vacancy in any particular firm until they apply for a job 1 b there are several characteristics besides the wage rate associated with a job which are important to the individual some like the normal length of a work week become known when the individual applies for the job information about other characteristics e g personalities of colleagues is acquired only gradually there is one important difference between the two kinds of imperfect in

a linear model for tracking error minimization abstract this article investigates four models for minimizing the tracking error between the returns of a portfolio and a benchmark due to linear performance fees of fund managers we can argue that linear deviations give a more accurate description of the investors risk attitude than squared deviations all models have in common that absolute deviations are minimized instead of squared deviations as is the case for traditional optimization models linear programs are formulated to derive explicit solutions the models are applied to a portfolio containing six national stock market indexes usa japan uk germany france switzerland and the tracking error with respect to the msci morgan stanley capital international index world stock market index is minimized the results are compared to those of a quadratic tracking error optimization technique the portfolio weights of the optimized portfolio and its risk return properties are different across the models which implies that optimization models should be targeted to the specific investment objective finally it is shown that linear tracking error optimization is equivalent to expected utility maximization and lower partial moment minimization