Self-Enforcing Wage Contracts Redux

Self-Enforcing Wage Contracts Redux

By Tim Worrall and Jonathan Thomas

Forthcoming in the Journal of Institutional and Theoretical Economics


This paper provides a personal perspective on self-enforcing wage contracts. We present a simple version of the model of Thomas and Worrall (1988) and explains its motivation, contribution and methodology. We discuss some of its limitations, the development of literature and its connection to the literature on relational contracting with an observable effort cost. We suggest some open questions for the future development of the literature.

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