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The paper studies the choice of workers to invest in changing sectors where their costs of doing so are (at least partly) unknown. There is a two sector perfectly competitive economy, where the sectors produce goods <math>X\,</math> and <math>Y\,</math> respectively. Both sectors use one factor, labour <math>L\,</math>, and have constant returns to scale.
Fernandez Rodrik (1991) - Resistance To Reform Status Quo Bias In The Presence Of Individual Specific Uncertainty (view source)
Revision as of 03:46, 8 March 2011
, 03:46, 8 March 2011ββThe Model
==The Model==
:<math>X = \frac{L_x}{a_x}\,</math>