This note explores the consequences of a player's freedom of choice over his degree of commitment for the bargaining outcome. In particular, we modify the nonstationary structure of Fershtman and Seidmann (1993)'s bargaining by allowing one player to possess imperfect commitments where the degree of commitment is chosen prior to the negotiation stage. We show that a player optimally chooses an intermediate degree of irrevocability provided the costs of increasing the degree of commitment are small enough. In this case, not only an immediate agreement is reached but also the commitment is effective. Copyright Springer-Verlag Berlin/Heidelberg 2004Deadline, Degree of commitment, Endogenous commitment.,
In this paper we explain the different conversion patterns of temporary contracts by the impact of employment protection in combination with differences in productivity between workers. We use longitudinal survey data from individuals to estimate a competing risks model with multispells for Spain. The model includes correlated unobserved determinants in the transition rates to deal with selectivity. We find that workers with higher levels of education have a stronger probability of finding a permanent job. In contrast, low-educated workers have a stronger probability of ending in unemployment or another temporary contract. Furthermore, we show the importance of employment protection in affecting the threshold level above which workers gain access to a permanent contract.
This article makes a contribution to the economics literature by inducing proper self-selection into contracts based on workers' motivation. The novelty of our results is that it points out the alternative potential role of the crowding-out effect to separate workers based on their motivation.
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