PHL295H1 Lecture Notes - Lecture 6: Dominate, Bilateral Monopoly, Profit Sharing
Document Summary
Employment at will (eaw): common law doctrine- you as an employer can fire anyone on a contract for any reason: us: greater than other legal statue. Reading: epstein: in defense of the contract at will. These two statues are pervasive but most of the employment relations remain subjected to the traditional common law rules which support freedom of contact and voluntary exchange. In the extreme situation employers (managers) are said to fire workers out of personal animosity: the animosity may stem from the workers refusal to grant personal or sexual favors or from a simple and irrational dislike (look at review) Three dominate standards/tests to examine the question. Intrinsic fairness: protecting liberty in society - liberty based thinking of employment: effects upon utility or wealth (efficiency): maximize wealth. Asymmetry of reputational losses: both employees and employers. Administrative costs - the costs in society as a whole (institutions) for employment.
