Pecchenino, Rowena A. and Byren, Julie and Hurley, Margaret (2017) Real Options? Labour Contracts for an Uncertain World. Working Paper. National University of Ireland Maynooth. (Unpublished)

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Abstract

The standard labour contract is no more. Increasingly it is replaced by flexible and diverse alternative work arrangements that can often be characterized as real options. In this paper we examine optimal labour contracts from the perspective of a competitive firm facing uncertainty concerning both the cost of production and demand for its product or service. We initially restrict the firm to offering ‘standard’ contracts then add various alternative flexibility enhancing contracts. We discuss the circumstances under which these alternative contracts are real options, interpret the strike, compare them to employment contracts currently found in the labour market, and assess the benefits and costs.

Item Type:	Monograph (Working Paper)
Additional Information:	Working Paper N283-17. An early draft of this work was presented in May 2017 at the Irish Economics Association Annual conference at NUI, Galway, May 2016, and at the NERI Labour Market conference at the University of Limerick. Conference participants are thanked for their comments.
Keywords:	Standard labour contract; alternative work arrangements; real options;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	8948
Depositing User:	Ms Sandra Doherty
Date Deposited:	02 Nov 2017 16:56
Publisher:	National University of Ireland Maynooth
URI:
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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