Suppose that the firm offered to provide a share of the increased marginal product given by v s(s) with the worker (where 0 1) How would this affect the firms investment in s How might this sharing affect wage bargaining in future periods ...

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Suppose that the firm offered to provide a share of the increased marginal product given by v

Question:

Suppose that the firm offered to provide a share of the increased marginal product given by αv s(s) with the worker (where 0 ≤ α ≤ 1). How would this affect the firm’s investment in s? How might this sharing affect wage bargaining in future periods?

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