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Holmstrom (1999) - The Firm As A Subeconomy (view source)
Revision as of 20:54, 29 November 2010
, 20:54, 29 November 2010no edit summary
We should call the terms on the left the incentive coefficients.
And the workers will respond to changes in <math>\beta\;</math>:
Thus as long as the measure is not collinear with output, it provides additional info and can be used to strengthen incentives. This extends directly to <math>n \;</math> workers.