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Contracts and the division of labor

Author: Daron Acemoglu; Pol Antràs; Elhanan Helpman; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2005.
Series: Working paper series (National Bureau of Economic Research), no. 11356.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Database:WorldCat
Summary:
"We present a tractable framework for the analysis of the relationship between contract incompleteness, technological complementarities and the division of labor. In the model economy, a firm decides the division of labor and contracts with its worker-suppliers on a subset of activities they have to perform. Worker-suppliers choose their investment levels in the remaining activities anticipating the ex post  Read more...
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Additional Physical Format: Print version:
Acemoglu, Daron.
Contracts and the division of labor.
Cambridge, Mass. : National Bureau of Economic Research, 2005
(OCoLC)60572420
Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Daron Acemoglu; Pol Antràs; Elhanan Helpman; National Bureau of Economic Research.
OCLC Number: 60655054
Notes: "May 2005."
Reproduction Notes: Electronic reproduction. [S.l.] : HathiTrust Digital Library, 2011. MiAaHDL
Description: 1 online resource (52 pages).
Details: Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002.
Series Title: Working paper series (National Bureau of Economic Research), no. 11356.
Responsibility: Daron Acemoglu, Pol Antràs, Elhanan Helpman.

Abstract:

"We present a tractable framework for the analysis of the relationship between contract incompleteness, technological complementarities and the division of labor. In the model economy, a firm decides the division of labor and contracts with its worker-suppliers on a subset of activities they have to perform. Worker-suppliers choose their investment levels in the remaining activities anticipating the ex post bargaining equilibrium. We show that greater contract incompleteness reduces both the division of labor and the equilibrium level of productivity given the division of labor. The impact of contract incompleteness is greater when the tasks performed by different workers are more complementary. We also discuss the effect of imperfect credit markets on the division of labor and productivity, and study the choice between the employment relationship versus an organizational form relying on outside contracting. Finally, we derive the implications of our framework for productivity differences and comparative advantage across countries"--National Bureau of Economic Research web site.

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