An uncertain price discrimination model in labor market
This paper investigates an uncertain price discrimination problem in labor market, in which the employees capability is his/her private information and characterized as an uncertain variable. To maximize the employers welfare, an uncertain price discrimination model in labor market is established. Moreover, a crisp equivalent form of the model is given, and the analytic solution is therefore obtained by employing variational method. This optimal solution shows that both the productivity and the wage are increasing with respect to the employees capability.
price discrimination labor market uncertain variable variational method