Efficiency Wages Revisited: The Internal Reference Perspective ∗ Jean-Pierre Danthine † Université deLausanne,FAME and CEPR
Bibliographic record
Abstract
Empirical evidence suggest that in many situations, firm-internal profit and productivity measures are important determinants of workers ’ effort decision. We demonstrate that the efficiency wage hypothesis based on such an internal reference perspective implies substantial wage rigidity in general equilibrium. By contrast, efficiency wage models based on the conventional external reference assumption fail to generate such rigidity. We then propose an explicit model of fairness in labor relations built on Rabin [1993] that accords well with the internal reference view and can be easily integrated into a general equilibrium framework. Our model predicts that (i) wages fluctuate very little with shifts in labor demand; (ii) effort is procyclical; and (iii) real wages are mildly countercyclical in response to demand shocks. Preliminary and incomplete. We thank Steve Ambler, Paul Beaudry, Samuel Danthine, Bruce Shearer and Etienne Wasmer for helpful suggestions. Earlier versions of this paper have been presented at the Montreal Macro Reading Group, the Lausanne macro workshop, McMasters University and the CIRPÉE research days. We thank the participants for their comments. Financial
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.003 | 0.013 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.002 |
| Science and technology studies | 0.001 | 0.003 |
| Scholarly communication | 0.003 | 0.004 |
| Open science | 0.001 | 0.002 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.006 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".