Download or read book Power in Pro¿t Maximizing Organizations (Classic Reprint) written by Julio J. Rotemberg and published by Forgotten Books. This book was released on 2016-10-29 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Power in Pro t Maximizing Organizations This has two implications. First, individuals who expect to stay at t+ 1 with higher probability are, all else equal, willing to pay more for the right to have decisions made according to their wishes. Thus, even if the firm were just trying to mimic the outcome that would prevail with an auction they would let these individuals have a large say. Second, and more importantly for my purposes, the firm will benefit by implementing the wishes of those employees that it wants to retain with high probability, even if these are not necessarily the employees who are willing to pay the most. The reason is that, by following these individuals' wishes, the firm raises the probability that they will stay in order to collect what amounts to a form of deferred compensation. The motivation for giving in uence to this subset of employees would vanish if the firm could write complete contracts that specify future wage compensation in all states of the world. But, as long as it is not possible to specify future wages in this fashion, the firm may benefit from giving in uence to employees it wants to keep, even if others are willing to pay more. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works."