The New Economics of Personnel

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Okun Arthur , ‘The Invisible Handshake and the Inflationary Process’, Challenge, Vol. 22, January-February 1980, pp. 5–12.

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A useful review is available in Yellen Janet , ‘Efficiency Wage Models of Unemployment’, American Economic Review, 74(2), 1984, pp. 200–5.

Dunlop John T. , ‘The Task of Contemporary Wage Theory’, in Dunlop John T. (ed.) The Theory of Wage Determination, New York: St. Martin's Press, 1957, pp. 3–27.

For details see Raff, Daniel M.G. and Summers, Lawrence H. , ‘Did Henry Ford pay efficiency wages?’, Journal of Labor Economics, 5(4) Part 2, 1987, pp. S57–S86.

Becker Gary S. , and Stigler, George , ‘Law Enforcement, Malfeasance, and Compensation of Enforcers’, Journal of Legal Studies, 3(1), 1974, pp. 1–18.

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Lazear Edward P. , ‘Agency earnings profiles, productivity, and hours restrictions’, American Economic Review, 71(4), 1981, pp. 606–20.

The marginal product may also lie below the opportunity cost of leisure to the individual so making retirement socially optimal.

In the USA the 1978 and 1986 amendments to the Age Discrimination and Employment Act exempted most workers from mandatory retirement.

Lazear, Edward P. , ‘Pensions as severance pay’ in Bodie Zvi , and Shoven John (eds), Financial aspects of the US pension system, Chicago: University of Chicago Press, 1983, pp. 57–89.

Alchian Armen A. , and Demsetz, Harold , ‘Production, information costs and economic organization’, American Economic Review, 62(5), 1972, pp. 777–95.

Malcomson James M. , ‘Work incentives, hierarchy and internal labor markets’, Journal of Political Economy, 92(3), 1984, pp. 486–507.

Lazear Edward P. , and Rosen, Sherwin , ‘Rank-order tournaments as optimum labor contracts’, Journal of Political Economy, 89(5) 1981, pp. 841–64.

O'Reilly, Charles A. , Main, Brian G.M. , and Crystal, Graef S. , ‘CEO compensation as tournament and social comparison: a tale of two theories’, Administrative Science Quarterly, 33(2), 1988, pp. 257–74.

Main, Brian G.M. , O'Reilly, Charles A. , and Wade, James , Top executive pay. Tournament or teamwork?, Haas Business School, University of California, Berkeley, 1990, Working Paper (November).