Consider three firms identical in all aspects (including the probability with which they discover a shirker), except

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Consider three firms identical in all aspects (including the probability with which they discover a shirker), except that monitoring costs vary across the firms. Monitoring workers is very expensive at Firm A, less expensive at Firm B, and cheapest at Firm C. If all three firms pay efficiency wages to keep their workers from shirking, which firm will pay the greatest efficiency wage? Which firm will pay the smallest efficiency wage?
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Labor Economics

ISBN: 978-0073523200

6th edition

Authors: George J. Borjas

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